Asset management executives anticipate a pivotal decision on the introduction of spot Ethereum Exchange-Traded Funds (ETFs) in the United States, with a consensus view that there’s a 50% likelihood of regulatory approval by May 2023.
During a panel discussion on Feb. 13, leaders from Bitwise Asset Management, Galaxy Asset Management, and Grayscale shared insights into the prospects of Ethereum ETFs, marking a significant moment for cryptocurrency investment products.
Matt Hougan of Bitwise expressed optimism, stating a “50/50 chance by May” for the approval of an Ethereum ETF, a sentiment echoed by Steve Kurz from Galaxy, who also suggested a 75% probability by the end of 2024.
Dave LaValle of Grayscale highlighted the uncertainty surrounding potential legal actions against the U.S. Securities and Exchange Commission (SEC) should their application face rejection, reflecting on Grayscale’s previous legal approach that led to the reconsideration of its spot Bitcoin ETF application.
The panel’s perspective aligns with forecasts from other industry experts. Nikolaos Panigirtzoglou of JP Morgan, Bloomberg ETF analyst James Seyffart, and predictions from the Polymarket suggest varying degrees of optimism, with estimates ranging from 48% to 60% for approval by May’s end.
Currently, Grayscale and Galaxy, in collaboration with Invesco, have pending applications with the SEC for a spot Ethereum ETF, alongside other prominent firms such as VanEck, ARK and 21Shares, Hashdex, BlackRock (iShares), Fidelity, and Franklin Templeton. The SEC’s decision on VanEck’s application, due by May 23, is highly anticipated and is expected to set a precedent for other similar proposals.
The United States market has yet to welcome a spot Ethereum ETF, with existing investment vehicles primarily focused on Ethereum futures. Bitwise and other asset managers, including Grayscale, offer Ethereum futures ETFs, which differ from direct exposure to the spot Ethereum market. Grayscale, in particular, aims to convert its Ethereum Trust and Ethereum Futures Trust into ETFs, further emphasizing the growing interest in Ethereum-based investment products.
