- For VanEck, Ethereum ETFs could be very successful in the market
- Their success could be similar or even surpass that of Bitcoin-based funds
- Considers that there is great institutional interest in this type of products
- However, perspectives on its possible approval vary.
- The first verdicts will come at the end of May of this year
US-based international investment firm VanEck believes that an Ethereum-based exchange-traded fund (ETF) could be in high demand among institutional investors, so such a product could prove as or more successful than the products launched two months ago related to Bitcoin.
Could be more successful than a Bitcoin ETF
This was reported by the portfolio manager for VanEck, Pranav Kanade, who during an interview with CoinDesk shared the company’s perspective on the Ethereum spot ETFs, which are awaiting regulatory approval from the Securities and Exchange Commission (SEC).
Regarding the prospects for this product, Kanade commented:
From a market perspective, part of me believes that the market size for a spot ETH ETF is potentially as large, if not larger, than spot Bitcoin ETFs.
In this regard, Kanade indicated that due to the operational characteristics of Ethereum, especially its staking-based model to support the operation of the network, the currency is extremely attractive to investors outside the cryptocurrency sphere. “Even if you don’t have an ETF that can offer staking as part of it, [ETH] is still a cash-producing asset, so I think ETH might make more sense as an asset for people than Bitcoin,” he noted.
Variable probabilities for approval
Given the success that Bitcoin ETFs have had in the market, the eyes of the crypto community and investors are now focused on Ethereum-based spot funds, which would be the next logical step on this path and whose first filings await response from SEC.
However, the perspectives on its possible approval are variable, precisely because it is a digital currency with different characteristics than Bitcoin. As we have indicated in previous editions, it could be said that perspectives are divided in this case.
On the positive side, we have, for example, the perspective of Standard Chartered, which indicates that this product has a largely success rate because the regulator has not openly categorized the digital currency ETH as a security, which it has done in other complaints against exchanges. and projects. Additionally, companies like Grayscale have already made their way and have their own fund based on the cryptocurrency, which they want to convert into an ETF just as they did with Bitcoin.
On the other side we have, for example, Bloomberg analysts, who see probabilities of success close to 30% considering that this product is not seeing the same progress as Bitcoin ETFs at the time. They highlighted the SEC meeting with Grayscale and Coinbase this month, where although there were no negative comments, the lack of positive perspectives was noted.
Perhaps the biggest sticking point regarding this product has to do with Ethereum and its staking mechanisms, which the SEC has hinted could qualify as unregistered securities offerings. However, this has not been stated categorically enough to set an exact precedent.
For now, we only have to wait until the end of May to know the first verdicts in relation to the Ethereum spot ETFs, since by this date the maximum deadlines for the SEC to respond to several of the requests in its office expire.
