After the recent approval of spot Ether exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC), industry experts came together to discuss the implications during a session hosted by Cointelegraph on X Spaces.
On May 23, the SEC approved the 19b-4 filings from various Ether (ETH) ETF applicants, including well-known names like VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise.
Following the approval of Ether ETFs, Gareth Jenkinson, the Managing Editor of Cointelegraph, hosted an X space discussion with Eric Balchunas, an analyst from Bloomberg, Matthew Sigel, the head of digital assets research at VanEck, Bill Hughes, the director of global regulatory matters at Consensys, and Yat Siu, the co-founder of Animoca Brands.
What can we expect after the approval of spot Ether ETFs? Balchunas predicts a scenario similar to what happened with spot Bitcoin (BTC) ETFs. He likened it to a “carbon copy horse race” where the same issuers would launch their ETFs on the same day. However, Balchunas believes that the volume for Ether ETFs may be lower compared to Bitcoin.
Despite this, Balchunas suggests that interesting trading moves could occur. Traders might short the ETF and buy ETH because it can be staked.
On the other hand, Sigel, representing one of the ETF issuers, mentioned that they will present a compelling investment case for Ethereum. The VanEck executive explained that they have been working on finding the perfect combination of Bitcoin and Ethereum, and they will release their analysis soon.
Sigel also believes that there are many tech and equity investors seeking assets with intrinsic value who may not be aware of Ethereum’s vibrant decentralized application (DApp) ecosystem.
Siu, who collaborates with the Hong Kong government to promote Web3 development, suggests that more developments can be expected as the U.S. enters the competition in the crypto and Web3 space. Hong Kong’s Securities and Futures Commission (SFC) previously approved its first spot BTC and ETH ETFs on April 15. Siu believes that other jurisdictions may follow suit and consider their own crypto-based ETFs.
With jurisdictions worldwide embracing crypto ETFs, Siu believes that the U.S. does not want to be left behind. He states, “I think the U.S. certainly doesn’t want to play second fiddle to anyone.” This suggests that the U.S. will likely see interesting developments in the near future.
Regarding the classification of Ethereum, Hughes, the Consensys lawyer, notes that while the SEC did not explicitly state that ETH is a commodity, the approval of ETFs implies that it is. However, Hughes believes that the SEC should be more transparent about the implications of its rulemaking.
Furthermore, Hughes remains skeptical about whether the SEC will adopt a more lenient stance on crypto-related matters in the future, despite the approval of ETFs. He suggests that this development may highlight the tensions in the legal theories that the SEC has been using to justify its enforcement actions.
In conclusion, the approval of spot Ether ETFs marks a significant milestone in the cryptocurrency industry. It not only opens up new investment opportunities but also signals a shifting tide in sentiments towards crypto in the United States. The battle between regulators and the crypto industry is far from over, and it will be interesting to see how it unfolds in the coming months.