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Crypto investment firm Bitwise has filed an application with the Securities and Exchange Commission (SEC) to establish a spot Ethereum exchange-traded fund (ETF).
This action positions Bitwise among numerous participants in the competition to launch the first Ethereum spot ETF, following the successful introduction of Bitcoin spot ETFs earlier this year.
As per the S-1 registration document submitted by Bitwise, the proposed “Bitwise Ethereum Trust” would hold Ethereum and may also participate in staking activities through reliable providers to earn additional rewards.
Staking entails locking up ETH to secure the Ethereum network and validate transactions, with participants receiving newly minted ETH as compensation.
Bitwise is releasing a new correlation analysis today as part of its spot Ethereum ETF filing.
This marks the first ETH correlation analysis to replicate the specific methodology employed by the SEC in its assessment of bitcoin, and the findings are promising.
The correlation… pic.twitter.com/dOLh0F50BE
— Bitwise (@BitwiseInvest) March 28, 2024
Interest in Spot Ethereum ETFs Increases
Bitwise’s entry into the Ethereum spot ETF arena coincides with the rising interest from traditional financial institutions to provide such offerings.
In recent months, major industry players like BlackRock, Grayscale, and VanEck have also submitted proposals to the SEC to launch their own Ethereum spot ETFs.
The growing number of applicants underscores the demand for investment products that provide exposure to the second-largest cryptocurrency without necessitating that investors directly buy and store it themselves.
Bitwise’s application follows a statement from one of its executives, Matt Hougan, Chief Investment Officer, who expressed skepticism about the approval of an Ethereum spot ETF during the summer, contrary to widespread expectations.
Hougan indicated that a later launch date, potentially in December, might be more beneficial for spot Ethereum ETFs, allowing traditional finance (TradFi) additional time to absorb the recent Bitcoin ETF launches.
The most controversial thing I said on stage at @blockworksDAS today:
Spot Ethereum ETFs will gather more assets if they launch in December vs. if they launch in May. TradFi needs more time to digest the bitcoin ETFs.
— Matt Hougan (@Matt_Hougan) March 19, 2024
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The SEC has postponed decisions on several prominent Ethereum spot ETF applications, including those from BlackRock, Grayscale, Fidelity, Invesco, and Galaxy Digital.
Initial forecasts, such as those from James Seyffart of Bloomberg, anticipated delays until May 23, which was the deadline for the earliest applications from VanEck and Cathie Wood’s Ark Invest.
However, Seyffart now believes that these applications will ultimately be rejected.
“My cautiously optimistic attitude for ETH ETFs has changed from recent months,” he noted in a recent post on X.
“We now believe these will ultimately be denied May 23rd for this round. The SEC hasn’t engaged with issuers on Ethereum specifics. Exact opposite of Bitcoin ETFs this fall.”
Standard Chartered Predicts SEC Will Approve ETH ETFs by May
Despite the delays, some analysts remain hopeful about the future of Ethereum spot ETFs.
Standard Chartered, a British multinational bank, anticipates that the SEC will approve such products by May, citing the absence of ether being designated as a security by the regulator.
The bank also forecasts that the price of ETH could reach $8,000 by the end of this year and $14,000 by the end of 2025, partly driven by the expected approval of spot ETFs.
Meanwhile, the Ethereum network has exceeded one million validators, with around 32 million Ether, valued at approximately $114 billion, staked within the network.
The 32 million ETH staked represents roughly 26% of the total supply, indicating a significant commitment to Ethereum’s proof-of-stake (PoS) consensus mechanism.
The post Bitwise Joins Ethereum Spot ETF Race, Files Application with SEC appeared first on Cryptonews.
