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Ethereum ETF: A Dream Falling Apart?

Wed 10 Apr 2024 ▪ 3 min of reading ▪ by Luc Jose A.
Invest

The crypto and financial industries are hopeful that the Securities and Exchange Commission (SEC) will rule in favor of a spot Ethereum ETF. However, some experts believe their hope may be in vain, as the chances of such a prospect coming to fruition seem to be dwindling. Here’s why they are so pessimistic.

Ethereum: Prospects for an ETF grow dimmer

The Ambiguity of Ethereum’s Crypto Status as a Key Obstacle

While Bitcoin spot ETFs have gained some popularity, expectations for approval of a spot Ethereum ETF are facing a harsh reality. The prospects for a Spot Ethereum ETF seem to be growing dimmer.

During the Paris Blockchain Week conference, Jan van Eck, CEO of asset manager VanEck, shared his pessimism about this possibility. He mentions the uncertainty surrounding the application submitted by the company he leads. But that is not the main reason for his doubts.

The head of Van Eck believes that unlike bitcoin (BTC), which is widely regarded as a decentralized commodity, the regulatory classification of ether (ETH) remains ambiguous. It is this lack of clarity that complicates the approval process for the highly anticipated Ethereum ETF.

Consequently, he no longer rules out the possibility that the SEC may outright reject his company’s Ethereum ETF application. Furthermore, an asset manager like Ark Invest, headed by Cathy Wood, whose application is expected to be reviewed in May, could also face the same fate.

Little Enthusiasm Now for an Ethereum ETF

Jan van Eck’s view is just an echo of an opinion that is increasingly spreading among crypto and financial industry players. Indeed, he is not the only one expressing doubts about the approval of a spot Ethereum ETF.

Jean-Marie Mognetti, CEO of CoinShares, is of the same opinion. He has expressed his skepticism about obtaining the SEC’s green light, contrary to what happened with Bitcoin in January. However, he does not outright dismiss this possibility.

He implied that approval might not materialize until the end of the year, even though he acknowledges concerns about Ethereum’s consensus model, which relies on stakers rather than miners.

In short, the excitement around the emergence of a spot Ethereum ETF has given way to the industry players’ doubts within a backdrop of regulatory hurdles. Knowing that the road to the approval of this instrument might prove to be tough and prolonged, investors and crypto players must arm themselves with patience while waiting for regulators’ clarifications.

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Luc Jose A. avatar
Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.