The US SEC’s approval process for spot Ethereum ETF applications continues. In this process, ETF experts say that it is not long before the trading of the products begins. However, Bernstein analysts predict lower demand for spot Ethereum ETFs compared to Bitcoin ETFs. Analysts expect the lack of ETH staking to reduce spot ETH conversion. Bitcoin’s first-mover advantage could saturate overall demand for crypto ETFs.
US SEC Chairman: Spot Ethereum ETF approval process “Smooth”
cryptokoin.comAs you follow from , the market is experiencing sharp fluctuations these days. In this uncertain environment, investors are awaiting the launch of spot Ethereum ETF products in anticipation of a catalyst. Although different dates have been announced for this, there is no clear date yet. So they’re looking for clues in SEC Chairman Gary Gensler’s speeches. SEC Chairman Gary Gensler said in his latest statements that there is no problem in the spot Ethereum ETF approval process. Gensler stated that the process went “smoothly.”
According to analysts, Ethereum ETF will be in lower demand compared to Bitcoin!
A new research report by Bernstein suggests that Ethereum ETFs will see investor demand, albeit on a smaller scale, compared to their Bitcoin counterparts. Bernstein analysts Gautam Chhugani and Mahika Sapra emphasize that the lack of ETH staking feature in the ETF could result in less spot ETH conversion. However, they note that basis trading is expected to become more attractive to investors over time. Basis trading involves buying the spot ETF and simultaneously selling the futures contract while waiting for prices to converge. This strategy is expected to provide ample liquidity in the ETF market.
Echoing this outlook, financial giant JPMorgan suggested last month that demand for spot Ethereum ETFs would likely be significantly lower compared to Bitcoin ETFs. The Bernstein report cites Bitcoin’s first-mover advantage and its potential to dominate the overall demand for crypto exchange-traded funds. Notably, the US SEC granted initial approvals for spot Ethereum ETFs last month. However, investment product listing and trading are pending as issuers’ S-1 registration statements are under review. The community expects Ethereum spot ETFs to begin trading early next month.
A more refined regulatory framework for other digital assets
Bernstein analysts also highlight ETH’s growing role as the primary tokenization platform. They highlight the strong use case for stablecoin payments and tokenization of traditional assets and funds. They also state that a more refined regulatory framework is needed for Ethereum and other digital assets. Bernstein predicts that the regulatory narrative will evolve as the US elections approach, especially with the increasing likelihood of a Republican victory and former President Trump’s pro-crypto stance.
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