Spot Ether ETFs: A Sidekick to Bitcoin or a New Leader in the Making?


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The impending launch of spot Ether exchange-traded funds (ETFs) in the United States has divided the crypto community. While some believe this would be medicine for the cryptocurrency, others think it would merely be a sidekick to Bitcoin ETFs. 

When spot Bitcoin ETFs debuted on January 11, they set a high bar for success. Within the first week, these ETFs collected over $701 million worth of Bitcoin. Despite the ongoing bloodbath, the products have recorded $14.8 billion in inflows since their approval. Such massive inflows have set a high benchmark for the upcoming spot Ether ETFs.

Pessimistic Outlook

During an interview with Cointelegraph, Eric Balchunas, a senior ETF analyst at Bloomberg, recently stated that the hype surrounding these new financial products may not live up to expectations when compared to the massive success of spot Bitcoin ETFs. He states:

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“Bitcoin is like enough crypto hot sauce. You’re like, you know I’m good. These things move together anyway. Ethereum is harder to explain, but I’m just seeing it being a sidekick [to Bitcoin].”

This highlights the relative ease with which investors grasp Bitcoin’s value proposition as “digital gold.” In contrast, Ethereum’s broader decentralized finance (DeFi) ecosystem, often likened to a tech stock, presents a more complex narrative for traditional retail investors.

Optimistic Outlook

On the other hand, Jag Kooner, head of derivatives at Bitfinex, offers a more optimistic perspective. He believes that these newly-launched ETFs would capture upto 20% of the bitcoin ETFs investments. Similarly, Ophelia Snyder, co-founder of 21Shares, states:

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“The Ether ETFs will be a successful ETF launch. It will do significantly better than the average ETF. I think it will probably be in the top decile of ETF launches ever.”

Ether ETFs’ Current Status

In May, the Securities and Exchange Commission (SEC) had approved 19b-4 filings from eight Ether ETF bidders. Despite this approval, asset managers are still fine-tuning their Form S-1s, which are the final documents the agency must greenlight before these ETFs can begin trading.

Some analysts speculate that the SEC might approve these funds for trading as early as the first week of July. On June 25, the agency’s Chair Gary Gensler stated that the Ether ETFs launch is “going smoothly.” However, Gensler refrained from committing to a specific timeline, stating:

“It’s really about the asset managers making the full disclosure so that those registration statements can go effective.”

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