It’s unlikely that U.S. regulatory authorities will approve Ethereum (ETH) exchange-traded funds (ETFs) as investment products, and the crypto community may not mount a strong legal challenge in response, based on Bloomberg ETF analyst Eric Balchunas’ assessment.
The most recent perspective from the analyst is disappointing news for Ethereum supporters, marking a significant shift from his earlier enthusiasm towards Bitcoin ETFs prior to their sanctioning in January.
Are Ethereum ETFs Worth Fighting For?
On Wednesdays, Balchunas challenged a widely-held belief that crypto industry players will file lawsuits against the Securities and Exchange Commission (SEC) should the SEC decline to endorse ETH spot ETFs by May – their self-imposed deadline for rendering decisions on numerous applications.
“Balchunas raised an eyebrow at this, as just 4% of the assets are tied up in Ether futures ETFs compared to Bitcoin futures. Such a large investment could yield relatively small returns.”
The ProShares Bitcoin Strategy ETF (BITO), the first Bitcoin futures ETF in the US, attracted $1 billion in just two days after its launch in 2021. Currently, it manages $2.7 billion in Bitcoin futures contracts, while its largest leveraged competitor holds approximately $1.6 billion.
In contrast, the ProShares Ether Strategy ETF, which was launched about two years afterwards, failed to attract the same level of investor interest and currently manages just $72 million in assets under management. This could be an indication that institutional investors are less enthusiastic about investing in the second-largest digital asset.
Some major Bitcoin ETF backers, including Bitwise Asset Management’s CIO Matt Hougan, have previously stated that Ether ETFs could potentially gain more traction if introduced later than their Bitcoin equivalents. Hougan added that Bitcoin has unique appeal to institutions due to its distinct position in the cryptocurrency market.
Additionally, Robert Mitchnick, BlackRock’s Head of Digital Assets, stated in March that Bitcoin holds the top position as the preferred crypto investment among their clients. He further mentioned that there is a significant interest in Ethereum next, while other cryptocurrencies receive minimal attention.
What Does Grayscale Want?
Instead, Ethereum supporters argue that comparing the performance of Ethereum futures ETFs is inappropriate due to the significant difference in their launch dates.
“Sassal.eth pointed out on Twitter early in March that GBTC had managed $30 billion assets before conversion (on Jan 10th), while ETHE only had $7.3 billion.”
Previously, the Securities and Exchange Commission (SEC) had expressed reservations against Bitcoin spot exchange-traded funds (ETFs), stating that these types of funds could be easier to manipulate in the markets than Bitcoin futures ETFs.
Grayscale’s year-long legal battle resulted in a change of heart from the authorities, leading to the approval of Bitcoin ETFs. Unfortunately, this decision also brought about more competitors, causing the Grayscale Bitcoin Trust (GBTC) to lose approximately half of its Bitcoin holdings within just three months.
“Do you genuinely believe that Grayscale will be willing to cover the legal costs and face potential more withdrawals for an undertaking that seems likely to be significantly less profitable compared to BlackRock’s past successes, as per Balchunas’ assessment?”
Read More
- UFO PREDICTION. UFO cryptocurrency
- The Last Epoch Dilemma: Confronting the Gold Dupe Crisis
- Finding Resources in Palworld: Tips from the Community
- BONE PREDICTION. BONE cryptocurrency
- Michelle Yeoh Will Not Appear in ‘Avatar 3,’ Says James Cameron: ‘She’s in 4 and 5’
- Last Epoch: Why Keystroke Registration Issues Are Frustrating Players
- EUR HKD PREDICTION
- Skull and Bones: Gamers’ Frustrations with Ubisoft’s Premium Content Delivery
- TANK PREDICTION. TANK cryptocurrency
- Abiotic Factor: Players Discuss the Need for Quick Character Adjustments in-game
2024-04-11 21:44