TLDR
- Spot Ethereum ETFs are nearing approval, with issuers and the SEC working through final details.
- Bitwise’s Katherine Dowling says they’re “close to the finish line” but an exact launch date is unknown.
- The SEC has been open to discussions about non-Bitcoin and Ethereum crypto products.
- Ethereum ETFs may be more complex to explain than Bitcoin ETFs, but still have significant appeal.
- Bitwise positions itself as a crypto specialist to stand out in the competitive ETF market.
The investment products, which would allow investors to gain exposure to Ethereum without directly owning the cryptocurrency, have been in the works for some time. Now, it seems they’re nearing the finish line.
Katherine Dowling, Chief Compliance Officer at Bitwise Asset Management, recently shared insights on the progress of these ETFs.
Speaking to Bloomberg, Dowling noted that the back-and-forth between ETF issuers and the Securities and Exchange Commission (SEC) is winding down.
“We’re seeing in the S-1 amendments that there are fewer and fewer issues that are being vetted back and forth between issuers and the SEC,”
she explained. This suggests that the launch of Ethereum ETFs could be just around the corner.
Bitwise Chief Compliance Officer Katherine Dowling discusses her firm's Ether ETF application and the potential for new products tied to crypto https://t.co/hKIvliRCnX pic.twitter.com/PvMFeG4wWU
— Bloomberg Crypto (@crypto) July 9, 2024
However, Dowling was quick to point out that an exact launch date remains unknown. SEC Chair Gary Gensler had previously hinted at a summer launch, but as Dowling humorously noted,
“Everyone has a different definition of summer. It’s been a little bit of a long, hot summer for the issuers waiting.”
The road to Ethereum ETFs has been a long one. In May 2024, the SEC approved a proposal from exchanges to list these products.
However, a separate approval is still required for their actual launch. Currently, eight U.S.-based spot Ethereum ETFs are awaiting the green light.
While Bitcoin ETFs have already made their debut, Ethereum ETFs present a unique challenge. Dowling acknowledged that explaining Ethereum’s value proposition might be more complex than Bitcoin’s “digital gold” narrative.
She emphasized that this complexity doesn’t make Ethereum any less appealing to investors. In fact, she believes that Ethereum’s technological innovations and business applications make it an attractive investment option.
Interestingly, the SEC’s openness to crypto products doesn’t stop at Bitcoin and Ethereum. Dowling revealed that the regulator has been receptive to discussions about other cryptocurrency products as well. This suggests a potential broadening of the crypto ETF landscape in the future.
As the launch of Ethereum ETFs approaches, competition among issuers is heating up. Bitwise, for instance, is positioning itself as a crypto specialist with years of experience in the space.
Dowling highlighted the importance of behind-the-scenes operational mechanisms that ensure tighter trading spreads and better outcomes for investors.
The potential impact of Ethereum ETFs on the market could be significant. Matt Hougan, Bitwise’s Chief Investment Officer, speculated that these ETFs could attract up to $15 billion in inflows during their first 18 months of trading. This figure is comparable to what Bitcoin ETFs have achieved since their launch six months ago.
While Ethereum ETFs are grabbing headlines, other cryptocurrencies are also vying for ETF status. The Chicago Board Options Exchange (CBOE) recently filed applications to list spot Solana ETFs on behalf of VanEck and 21Shares.
Some analysts are skeptical about the approval chances for ETFs beyond Bitcoin and Ethereum under the current SEC leadership.
