When Ethereum ETF? | Matt Hougan & Ryan Rasmussen of Bitwise
Apr 1, 2024
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Experts from Bitwise discuss the potential approval of an Ethereum ETF, comparing it to the success of the Bitcoin ETF. They explore the implications, strategies, and broader impacts on the cryptocurrency industry, including forces at play, ETH narratives, and the price impact of an ETH ETF. The podcast covers retail investors' edge in crypto investing, Vanguard's evolving perspective on Bitcoin and ETFs, and the potential launch of Ethereum ETFs by the end of the year.
Engagement with SEC crucial for Ethereum ETF approval.
Legal challenges and BlackRock's interest support Ethereum ETF approval.
Gradual adoption of Bitcoin ETF as catalyst for Ethereum ETF launch.
Deep dives
Bitcoin ETF Approval Likelihood
The likelihood of an Ethereum ETF approval is discussed, with insights suggesting a decreasing probability for May. This trend is attributed to a lack of direct engagement between applicants and the SEC, as seen in previous successful Bitcoin ETF filings. The expectation of engagement in late April would signal increased chances of approval. The probability is estimated over 50% by year-end, with considerations for allowing time to digest the Bitcoin ETF before launching the Ethereum ETF.
BlackRock Support and Legal Factors
BlackRock's interest in the Ethereum ETF and past successful filings are key factors supporting the potential approval. Additionally, ongoing court cases challenging the SEC's actions, such as the grayscale win, provide legal pressure that could influence a favorable decision for the Ethereum ETF approval.
Securing Approval
The discussion highlights the significance of BlackRock's backing and legal challenges as favorable indicators for the Ethereum ETF approval. The insights suggest these factors could outweigh potential SEC hesitations and contribute to a more optimistic view of approval by the end of the year.
Industry Readiness and Influence
The industry's gradual adoption of the Bitcoin ETF is seen as a catalyst for a successful Ethereum ETF launch. The evolving landscape, court cases against the SEC, and BlackRock's involvement are viewed as positive forces shaping the potential approval timeline, indicating readiness for an Ethereum ETF by year-end.
Implications of an Ethereum ETF Approval
The discussion in the podcast focuses on the potential impact of an Ethereum ETF approval, highlighting the significance of Ethereum's future-based ETF and its correlation with SPOT. The speaker emphasizes the strong case for an Ethereum ETF due to high liquidity in the ETH futures market and compelling data, suggesting a positive outcome for approval. The benefits of ETFs, including cost reduction for investors, enhanced security, and improved trading conditions, are emphasized as factors that could influence the SEC's decision.
Factors Influencing Delay in Ethereum ETF Approval
Conversely, the podcast explores potential reasons for a delay in approving an Ethereum ETF, citing political pressure and regulator considerations as inhibiting factors. The conversation speculates on political influences hindering approval, despite a diminishing anti-crypto sentiment. The SEC's hesitance may stem from concerns regarding ETH's reclassification as a non-security and the need for further endorsement. Additionally, the complexity of integrating staking into the ETF and ensuring data quality and liquidity standards are met are highlighted as potential behind-the-scenes barriers to approval.
0:00 Intro 6:50 Bitcoin ETFs So Far 10:40 BTC ETF 2nd Acceleration 22:56 Crypto Default Allocation 26:31 Who’s Buying the BTC ETF? 28:59 Bitcoin vs Gold 36:46 When ETH ETF? 46:39 Forces at Play 53:25 ETH ETF Derivatives 58:38 ETH ETF Price Impact 1:02:10 ETH Narratives 1:08:31 What’s Next 1:12:02 Closing Thoughts
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