Bitwise investment chief Matt Hougan expects the investment firm to become a key player in the world of Ethereum ETFs, but strategically hopes for a December approval for the products instead of rushing into it in May. The firm recently filed an SEC application to launch a Spot Ether ETF to replicate the success of recent Spot Bitcoin ETFs, positioning Bitwise as a potential competitor in the market. The proposed “Bitwise Ethereum Trust” would directly own Ethereum and may leverage staking services offered by reputable custodians to generate additional returns. Despite challenges in garnering interest in Ethereum from financial advisors, Hougan is confident in the approval of an Ether ETF.
Ethereum has struggled to attract the attention of investors, despite the recent Dencun upgrade. Financial advisors are finding it difficult to look beyond Bitcoin, with Ethereum’s absence from recent industry discussions. However, US spot Bitcoin ETFs saw a renewed influx of capital last week, indicating a positive turnaround after a period of net outflows. Ten approved spot Bitcoin ETFs collectively generated $418m on March 26, with offerings from BlackRock and Fidelity leading the surge.
Hougan believes in a gradual introduction of Ethereum ETFs, with Bitcoin acting as the initial entry point for investors followed by a desire for diversification. Bitwise’s Ryan Rasmussen projected a 50% chance of approval for a Spot Ether ETF by May, a sentiment shared by the market. Despite the expected approval in May, Hougan suggests that a December launch would be more strategically advantageous. He believes that traditional finance (TradFi) is still adapting to Bitcoin, and giving them time to get comfortable with Bitcoin and crypto will make them more receptive to the introduction of an Ethereum ETF.
In an interview with Forbes, Hougan expressed his confidence in securing an Ether ETF and emphasized the importance of timing in the launch. He expects a sequential adoption pattern within the crypto investor base, starting with Bitcoin and then moving towards other assets like Ethereum. While the market anticipates an approval in May, Hougan believes that waiting until December would allow traditional finance to become more familiar with Bitcoin and crypto, making them more prepared for the introduction of an Ethereum ETF. By taking this approach, he believes Bitwise can strategically position itself in the market and potentially attract more investors.
Bitwise’s SEC application for a Spot Ether ETF signals their intention to compete in the growing market of cryptocurrency ETFs. By directly owning Ethereum and potentially leveraging staking services, Bitwise aims to generate additional returns for investors through their proposed “Bitwise Ethereum Trust.” As the market continues to evolve and adapt to the world of crypto assets, the launch of an Ethereum ETF could attract more institutional investors and pave the way for further growth in the industry. Despite the challenges in attracting investor attention to Ethereum, Hougan remains optimistic about the future of cryptocurrency ETFs and Bitwise’s role in this evolving landscape.
