Experts Say Spot Ethereum ETF Approval Will Lead to Widespread Crypto Adoption

The SEC has partially approved the applications for Spot Ethereum ETFs, advancing the crypto industry in the US.
Key analysts and firms react positively, expecting the approval to push crypto to mainstream adoption and all-time highs.
Despite excitement, some analysts caution about the ETFs initial demand, referencing mixed results in Hong Kong.

In a step forward for the crypto industry in the United States, the Securities and Exchange Commission (SEC) has approved in part the applications for Spot Ethereum exchange-traded funds (ETFs). The Commission approved 19b-4 filings for several exchanges: NYSE, CBOE and NASDAQ – and although these funds are not ready for trading yet, the industry reacted positively to the development.

Bloomberg analyst James Seyffart, who was one of the first to break the news, commented that just a week ago he would have called it “a little crazy to think that these ETFs were going to get SEC approval”.

Related: ETH Staking Barred in New ETFs, Yet Hong Kong’s Regulator Explores Alternatives

Grayscale said in a statement that they appreciate to work “constructively with regulators as they review spot Ethereum ETFs”, adding:

We remain optimistic about the potential of bringing Ethereum further into the US regulatory perimeter in the ETF wrapper.

Grayscale

Crypto Goes Mainstream With Approval

Bitwise’s Matt Hougan wrote in a blog post earlier this week that “this progress will push crypto to all-time highs”, opening the road for crypto to go mainstream.

Crypto is in the process of going mainstream, and that this progress will push crypto to all-time highs.

Matt Hougan, Bitwise

Hougan added that the recent approval of the FIT21 Bill, which just passed the US House of Representatives with bipartisan support, was likely a huge catalyst for adoption, alongside the fund approval.

This newfound support for crypto in DC — whether we get the spot Ethereum approval or not — is the latest proof point.

Matt Hougan, Bitwise

VanEck’s Head of Digital Assets Research, Matthew Sigel, commented that the firm expects “the improved political backdrop will lead to further victories for digital asset investors and developers”, adding that laws and courts will drive investment toward decentralised platforms like ETH and BTC and others.

We are so thrilled to confirm that the SEC has approved, pursuant to Section 19(b) of the Securities Exchange Act of 1934, our exchange partner CBOE’s proposed rule change to list and trade a @vaneck_us spot #Ethereum ETF on the CBOE! 🥳🚀
TLDR: We expect the improved political… pic.twitter.com/o6ZbFWKExi
— matthew sigel, recovering CFA (@matthew_sigel) May 23, 2024

Approval to Drive Demand But Some Analysts Remain Cautious

While analysts at Bernstein said the price of ETH would surge on the ETF approval – they estimate US$6,600 (AU$10,000) for one ETH – other analysts urged caution.

Analysts at Kaiko pointed towards the ETFs in Hong Kong, which didn’t see much initial demand and “have had mixed days with several net outflow days already.”

They noted that a lack of staking in these funds could be one of the reasons for this underperformance, and sources say the Securities and Futures Commission (SFC) is seeking to remedy this issue.

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