• Bitwise and VanEck launched Ethereum ETFs in the US, signaling the growing acceptance of cryptocurrencies in traditional finance.
• The market anticipates SEC approval for these ETFs, with VanEck’s unique approach directing profits to Ethereum developers.

By introducing Ethereum futures exchange-traded funds (ETFs), two well-known brands in the finance industry, Bitwise Asset Management, and VanEck, have made a substantial entry into the US cryptocurrency market. This historic move reflects the increasing integration of digital currencies into traditional financial landscapes.

Bitwise Asset Management’s offerings include the Bitwise Ethereum Strategy ETF (AETH) and a unique ETF focusing on Bitcoin and Ethereum futures. The AETH ETF grants investors direct access to Ether by trading pure Ether certificates. In contrast, Bitwise’s second ETF provides a well-balanced mix of Bitcoin and Ethereum futures, diversifying investment options.

SEC Endorsement and Market Uplift

Despite the eager anticipation of these ETFs within the crypto sphere, Bitwise and other asset management firms have patiently awaited official approval from the United States Securities and Exchange Commission (SEC). Encouragingly, experts within the financial sector are increasingly confident that accelerated application processes will lead to quicker approvals. Bloomberg analyst James Seyffart has expressed this optimism, foreseeing short-term endorsement of these ETFs.

VanEck, another influential player in asset management, has entered the Ethereum ETF arena with a unique twist. Their Ethereum futures ETF stands out by allocating ten percent of its profits to Ethereum developers. This philanthropic endeavor aims to bolster the Protocol Guild, an organization encompassing 150 Ethereum core developers, fostering continued advancements within the Ethereum blockchain ecosystem.

BlackRock and Invesco are still awaiting approval for their applications to create spot Bitcoin ETFs from the United States Securities and Exchange Commission (SEC). The SEC has postponed its decision due to the impending U.S. government shutdown.

Moreover, the resolution of the Grayscale lawsuit, which advocates for converting the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF, could impact the timing of the SEC’s determination regarding the approval of spot Bitcoin ETF applications. On August 29, a U.S. court cleared the way for the potential endorsement of the Grayscale spot Bitcoin ETF by dismissing the objections raised by the regulatory agency.

Market Response and Ethereum’s Price Rally

The unveiling of Ethereum ETFs has instantaneously reverberated throughout the cryptocurrency market, resulting in a surge in Ether’s value. Following the announcement, Ether witnessed an impressive price rally in a matter of hours, surpassing a remarkable three percent increase. This surge closely mirrors the historical trend observed during the launch of Bitcoin futures ETFs in the United States in 2021, where Bitcoin also embarked on a bullish trajectory.

This development highlights the burgeoning enthusiasm within the cryptocurrency domain, particularly with regard to Ethereum. Ethereum has solidified its position as the second-largest cryptocurrency by market capitalization. The introduction of Ethereum ETFs in the United States signifies a growing acknowledgment of its potential among mainstream investors, extending beyond its status as a cryptocurrency to a versatile blockchain platform with many applications.

Bloomberg Analyst Boosts Odds for 2023

The odds of a Bitcoin ETF approval have risen, prompted by recent legal developments. Grayscale Investments’ federal court victory has heightened expectations that the SEC may become more inclined to approve such ETFs in the near future. Although recent delays have pushed back the decision schedule, the SEC must reach a final verdict for the seven firms in question by mid-March.

Eric Balchunas, an ETF analyst at Bloomberg, adjusted the probability of a spot Bitcoin ETF gaining approval by the close of 2023 to 75%. This adjustment stems from the favorable U.S. Court of Appeals Circuit decision in favor of Grayscale, significantly impacting the likelihood.

He has further increased those odds to 95% by the end of 2024, reflecting the increasing optimism within the cryptocurrency industry regarding the eventual approval of Bitcoin ETFs in the United States.

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