As optimism grows regarding the potential approval of a bitcoin ETF in the United States, industry watchers suggest that fund issuers may soon apply to launch products holding crypto’s second-largest asset. Yet the fate of such yet-to-be-filed ether funds would likely hinge on how the SEC treats the latest wave of filings from spot bitcoin ETF hopefuls.
The recent effort by asset management titan BlackRock to launch an ETF that would hold bitcoin directly has reinvigorated a decade-long attempt by a range of firms to get such an offering past the SEC. The $9 trillion asset manager’s filing was followed by renewed attempts by Bitwise, WisdomTree, Invesco, and Valkyrie to launch similar products.
The latest rush of spot bitcoin ETF proposals indicates prospective issuers believe “now is the time,” according to Neena Mishra, director of ETF research at Zacks Investment Research. She stated, “I would not be surprised to see an application to launch a spot ether ETF in the coming weeks. If one issuer starts the process, others would quickly join the race, not wanting to be left behind.”
However, Townsend Lansing, head of product at crypto asset manager CoinShares, said ether ETF filings likely don’t make much sense right now — beyond being a publicity stunt. He asserted that the SEC would likely react the same way it has reacted to all the BTC filings, eventually rejecting any ETF ether-related for failure to evidence a proper surveillance-sharing agreement.
On the other hand, a spot bitcoin ETF approval would further add interest from fund issuers to try ether (ETH) next, some said. It would indicate that the new proposed surveillance arrangement is enough to address their concerns, and the same would apply to the second-largest cryptocurrency, according to Mishra.
Lansing agreed, in the event that the SEC greenlights a spot bitcoin ETF, that fund issuers looking to launch an ether ETF next is “a reasonable assumption.” But the potential for such a product to be approved would depend on the SEC’s reasoning for permitting a spot bitcoin ETF, and the extent to which the ether market exhibits similar characteristics, he added.
Despite the recent press and surge of filings, Lansing expressed doubt about the approval of any spot crypto ETF as he considers it a difficult proposition. Andra Nicolau, head of business development and strategy at Origin Protocol, believes that it might still be premature to expect a spot ether ETF based on the demand for such a product.
Ultimately, as the crypto market evolves and regulatory clarity emerges, the chances of an ether ETF may increase. However, the spotlight remains on bitcoin ETFs for the moment, with industry participants watching closely to see how the SEC will address the proposals and whether this will pave the way for ether ETFs in the future.
Source: Blockworks
