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- Eric Balchunas from Bloomberg believes that the SEC will approve an Ethereum spot ETF once the deadline lapses in May following the approval of the BTC spot ETF on Jan. 10.
- Others like crypto lawyer Joe Carlasare and SkyBridge Capital’s Anthony Scaramucci say it’s not as straightforward and that the SEC will try to play games before the eventual approval.
A Bitcoin spot ETF is here, but when will we get a similar product for Ethereum? Experts are divided on when and whether the SEC will cave to the people’s will and give its nod for an Ether exchange-traded product. According to one Bloomberg ETF expert, the SEC will approve it by the May deadline. However, not everyone is as optimistic, pointing out that the anti-crypto nature of Gary Gensler could come into play.
The Bitcoin spot ETF approval was a monumental event for the crypto industry. It takes Bitcoin mainstream, opening the doors to hundreds of billions of dollars in investment from asset managers, investment advisors and other institutional investors. Additionally, unlike a futures ETF, a spot product invests directly in BTC, taking the crypto out of circulation and affecting supply, and consequently, the price.
But the next critical question now is, when will other cryptos get their spot ETFs? According to Eric Balchunas, Ethereum will be next. In an interview with one crypto news outlet, the Bloomberg ETF expert revealed that he had insider knowledge that Ether ETFs “will be fine. He added:
The Ether spot is tied to the hip of Bitcoin spot for sure. It’s gonna go wherever it goes. It’s basically like on a 15-foot rope following it.
Bloomberg ETF analyst Eric Balchunas said he expects a 70% chance of an Ethereum spot ETF being approved in May. The SEC needs to make approval decisions on multiple Ethereum spot ETF applications by the end of May, including VanEck, Ark 21Shares and Hashdex. Digital asset lawyer…
— Wu Blockchain (@WuBlockchain) January 11, 2024
According to Balchunas, there’s a 70% chance that the SEC will approve the Ether ETF by May.
The March Toward an Ethereum Spot ETF
A spot ETF has proven just how critical it can be. On its first day, the BTC ETF brought in over $4 billion in trading volume, a new record. However, not everyone is as optimistic that Ethereum will have its day in the sun.
Crypto lawyer Joe Carlasare says it might take longer than most people expect. He stated:
Ethereum spot ETFs will be approved, but the SEC will try to carefully craft a precedent that permits them to retain some discretion in determining which digital asset ETFs will be permitted to come to market.
This, the lawyer says, is to ensure that the SEC doesn’t set a precedent that gives market players the misguided belief that any crypto can have its own spot ETF.
Critically, Bitcoin is an outlier with the SEC. BTC is the only crypto that the SEC has consistently admitted isn’t a security. While the agency once put Ether in this category, it has since retracted its statement, especially since Ethereum has switched to the proof of stake consensus mechanism.
According to Anthony “The Mooch” Scaramucci, the founder of SkyBridge Capital and a former White House Communications Director, Gensler is the biggest impediment to the Ether ETF.
“As long as [Gensler]’s in power, it’s less likely [that an ETH ETF gets approved], frankly, but I do think it’s eventually likely,” he told CNBC.
