Spot Bitcoin (BTC) ETFs have been doing well ever since the SEC’s approval on Jan. 10, 2024. Noting a cumulative volume of over $73 billion, these ETFs have been pulling in over $3 billion daily for a while now. With such successes in spot BTC ETFs, many analysts and investors are turning their eyes to the potential approval of other spot crypto ETFs, including the possibility of a spot Ether ETF.
Is a spot Ether ETF coming? What do we know so far? Let’s talk about it.
What is a Spot ETF?
Before we get into the topic of a spot Ether (ETH) ETF, let’s first talk about what a spot ETF is.
Exchange-traded funds (ETFs) are investment products that track a particular index, sector, or product. ETFs work similarly to stocks where they can be purchased or sold regularly, offering a way to invest. Cryptocurrency ETFs expose investors to crypto without having to directly engage in crypto exchanges, offering a fresh new opportunity.
There are two types of ETFs, futures ETF and spot ETF. Futures ETF bets on an asset’s future price without holding the asset while a spot ETF holds the underlying asset, making it more akin to owning the asset itself. Spot ETF often reflects the price more directly, and the prospect of it being more like owning the asset draws investors in.
Spot ETH ETF works on this basis and will offer users the ability to invest in Bitcoin without needing to dive into crypto exchanges.
The Deadline is May 23rd, Expectations?
Deadlines, that’s what everyone wants to know about.
The current earliest date for approval would be March 10th for Blackrock’s spot ETH ETF filing, but the word around the block is that it will very likely be delayed further. It’s expected that the spot ETH ETFs will continue to be delayed until the final date for approval which would be May 23rd. This is the final deadline for the approval of the first wave of applications, which includes Grayscale and Blackrock’s application, and it’s believed that the approval will happen on or slightly before this date.
There are a couple of reasons for all the expected delays. The first reason is that the U.S. Securities and Exchange Commission (SEC) would prefer to observe the spot BTC ETFs a little more before moving on to the next crypto. The second reason is that the nature of Bitcoin and Ether is so different. Bitcoin is more similar to an actual currency while Ether is more akin to an asset utilized for a specific ecosystem. This difference might influence the SEC decision despite the outlook being that the spot ETH ETFs will be passed.
With a deadline in mind, what we can expect before and after this date is for ETH to see price and volume shifts. Depending on whether the spot ETFs are approved, not only will prices spike/drop accordingly, but other crypto might also see spot ETF applications. Bitcoin was the pioneer that opened this door, but a spot ETH ETF would serve as proof that crypto is here to stay and that the general opinion surrounding adopting crypto assets will be welcomed.
All we can do now, like we did with spot BTC ETFs, is wait for that decisive moment!
Why is a Spot Ethereum ETF Relevant Now?
As mentioned before, recent success from Bitcoin’s spot ETFs has left investors clamoring for more. Ether is the second largest cryptocurrency on the market, and it’s only natural that the success of the top crypto will garner more attention for the runner-up.
A spot ETH ETF was always in the talks for approval. The biggest barricade, however, was always having to “wait” until Bitcoin’s spot ETFs passed. This is due to the enormity of Bitcoin as the leading asset for the crypto industry, making it so that any breakthroughs in adoption will generally have Bitcoin lead it in some way.
With spot Bitcoin ETFs approved, the gate is now opened for other crypto to follow. Blackrock and Grayscale have already applied for a spot ETH ETF to be approved. This is significant in that Blackrock’s application for a spot Bitcoin ETF was what convinced everyone that the spot BTC ETF was going to be approved, so the same is expected this time.
With these bullish expectations in place, hold on to your seatbelts folks.
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What’s Next?
Next time, we will go more in depth about the next big milestone for Bitcoin: the halving. This event will likely cause major shifts in the market, maybe even more so than any spot ETFs can have. Catch us next time!
Disclaimer
Tips offered in this article are not and should not be treated as financial or business advice. Please proceed with any financial actions at your own risk.
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