Cryptocurrency investment firm Bitwise today filed an application with the Securities and Exchange Commission (SEC) to offer a spot Ethereum ETF. After successfully launching its Bitcoin spot ETF earlier this year, Bitwise joins an increasingly crowded field of companies competing to bring the first Ethereum spot ETF to market.
According to the S-1 registration form filed by Bitwise, the proposed “Bitwise Ethereum Trust” would hold Ethereum (ETF) and earn additional rewards by staking a portion of the fund’s assets through a trusted staking provider. Staking, a practice that has come under scrutiny by government regulators, involves locking up ether to secure the Ethereum network and verify transactions, with participants earning newly minted ether as rewards.
Bitwise’s entry into the Ethereum spot ETF race comes amid growing interest from traditional financial firms. In recent months, asset management giant BlackRock, digital currency investment firm Grayscale, and VanEck have all filed proposals with the SEC to launch their own Ethereum spot ETFs. Increasing competition reflects potential demand for such products as investors seek exposure to the second-largest cryptocurrency without having to purchase and store it themselves.
This filing comes shortly after Bitwise executives predicted that an Ethereum spot ETF would not be approved this summer as many had expected, and said waiting until the end of the year could be a good thing.
“Spot Ethereum ETF will raise more assets when it launches in December than when it launches in May,” Matt Hougan, chief investment officer at Bitwise, said in a recent tweet. “TradFi needs more time to digest Bitcoin ETFs.”
The SEC has postponed decisions on several high-profile Ethereum spot ETF applications in recent months, including those from BlackRock, Grayscale, Fidelity, Invesco, and Galaxy Digital. Analysts like Bloomberg’s James Seyffart originally expected These delays will continue until VanEck and Cathie Wood’s Ark Invest’s initial application deadline of May 23. He now thinks they will be rejected.
Despite the delay, some experts remain optimistic about the prospects for the Ethereum spot ETF.
British multinational bank Standard Chartered expects the SEC to approve such a product by May, citing regulators’ failure to designate ether as a security. The bank also predicted that the price of ether could reach $8,000 by the end of the year and $14,000 by the end of 2025, thanks in part to the approval of spot ETFs.
The potential impact of an Ethereum spot ETF on the cryptocurrency market could be significant. Since the Bitcoin spot ETF was approved in January, billions of dollars have flowed into the fund, sending prices of the leading cryptocurrency higher. A similar effect could be seen with Ethereum as traditional investors get a more accessible way to invest in the asset.
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