May could bring approval for Ethereum ETF, say asset managers with a balanced outlook
Asset management executives are eagerly awaiting a crucial decision regarding the introduction of spot Ethereum Exchange-Traded Funds (ETFs) in the United States. The consensus among these executives is that there is a 50% chance of regulatory approval by May 2023.
During a panel discussion on February 13, representatives from Bitwise Asset Management, Galaxy Asset Management, and Grayscale provided their insights into the potential of Ethereum ETFs. This marked a significant milestone for cryptocurrency investment products.
Matt Hougan of Bitwise expressed his optimism, stating that there is a “50/50 chance by May” for the approval of an Ethereum ETF. Steve Kurz from Galaxy echoed this sentiment, suggesting a 75% probability of approval by the end of 2024.
Dave LaValle of Grayscale emphasized the uncertainty surrounding potential legal actions against the U.S. Securities and Exchange Commission (SEC) if their application is rejected. He referred to Grayscale’s previous legal approach, which resulted in the reconsideration of its spot Bitcoin ETF application.
These panelists’ perspectives align with forecasts from other industry experts. Nikolaos Panigirtzoglou of JP Morgan, Bloomberg ETF analyst James Seyffart, and predictions from the Polymarket all suggest varying degrees of optimism, with estimates ranging from 48% to 60% for approval by the end of May.
Currently, Grayscale and Galaxy, in collaboration with Invesco, have pending applications with the SEC for a spot Ethereum ETF. Other prominent firms such as VanEck, ARK and 21Shares, Hashdex, BlackRock (iShares), Fidelity, and Franklin Templeton also have applications awaiting a decision. The SEC’s decision on VanEck’s application, expected by May 23, is highly anticipated and is likely to set a precedent for similar proposals.
The United States market has yet to see the introduction of a spot Ethereum ETF, as existing investment vehicles primarily focus on Ethereum futures. Bitwise and other asset managers, including Grayscale, offer Ethereum futures ETFs, which provide indirect exposure to the spot Ethereum market. Grayscale is particularly interested in converting its Ethereum Trust and Ethereum Futures Trust into ETFs, highlighting the growing demand for Ethereum-based investment products.
