Crypto investment firm Bitwise has applied to the SEC to launch a spot Ethereum exchange-traded fund (ETF) called the Bitwise Ethereum Trust. The proposed ETF would hold Ethereum and potentially engage in staking activities to earn additional rewards. Bitwise’s move is part of a growing trend of interest from traditional financial firms to offer Ethereum spot ETFs, with industry giants like BlackRock, Grayscale, and VanEck also filing proposals with the SEC. The increased number of applicants shows the demand for investment products that provide exposure to Ethereum without the need for investors to directly purchase and store the cryptocurrency.
Bitwise’s entry into the Ethereum spot ETF competition comes after one of its executives, Matt Hougan, expressed doubt about the approval of an Ethereum spot ETF during the summer, suggesting that a later launch date, possibly in December, might be more advantageous. The SEC has delayed decisions on several Ethereum spot ETF applications, including those from BlackRock, Grayscale, Fidelity, Invesco, and Galaxy Digital. Initial predictions of delays until May have now shifted with some experts believing that these applications will be denied, as the SEC has not engaged with issuers on Ethereum specifics.
Despite the delays, some experts remain optimistic about the approval of Ethereum spot ETFs. Standard Chartered expects the SEC to approve such products by May, citing the lack of designation of ether as a security by the regulator. The bank also predicts a significant increase in the price of ETH by the end of this year and 2025, partially driven by the expected approval of spot ETFs. Additionally, the Ethereum network has surpassed one million validators with approximately 32 million Ether staked within the network, representing approximately 26% of the total supply and highlighting the substantial commitment to Ethereum’s proof-of-stake consensus mechanism.
Bitwise’s introduction of an Ethereum spot ETF is part of the race to provide the first such product, following the successful launch of Bitcoin spot ETFs earlier this year. The increasing interest from traditional financial firms like BlackRock, Grayscale, and VanEck to offer Ethereum spot ETFs demonstrates the demand for investment products that offer exposure to the cryptocurrency without direct ownership. However, the SEC has delayed decisions on various Ethereum spot ETF applications, leading to uncertainty about the approval of these products. Despite this, some experts maintain optimism about the prospects of Ethereum spot ETFs and predict approval by May, potentially driving the price of ETH higher in the coming years.
The increasing number of applicants filing for Ethereum spot ETFs with the SEC reflects a broader trend in the financial industry towards offering cryptocurrency investment products. Bitwise’s proposed Bitwise Ethereum Trust would hold Ethereum and potentially engage in staking activities, showcasing the firm’s commitment to providing innovative investment opportunities in the crypto space. With the Ethereum network surpassing one million validators and a significant amount of ETH staked within the network, there is a strong indication of support for Ethereum’s proof-of-stake consensus mechanism and the potential for further growth in the cryptocurrency space.
