Within the cryptocurrency market, Bitwise, a well-known crypto manager, has taken a significant step and is now introducing a new investment product that deals with Ethereum, the second-largest digital currency worldwide in market cap. The entity has already filed with the SEC an S-1 form, where it has disclosed its intentions to launch a spot-based Ethereum ETF.
The SEC is said to be set to approve the ETF dubbed the Bitwise Ethereum ETF that would be listed in the NYSE Arca, a milestone for the accessibility of cryptocurrency-based products within traditional financial markets.
The issued ETF is intended to provide investors with direct Ethereum exposure, functioning on Coinbase’s Custody as the deposit for the Trust digital assets. This initiative is not our crypto ETF company’s first step in ETFs based on cryptocurrency. One example that happened last October was when the company came out with a product of Ethereum futures via an ETF (exchange-traded fund) to demonstrate its continued efforts to diversify its range of investments associated with digital currencies.
Advertisement
Bitwise’s move to open a regulated spot Ethereum ETF bridges the gap behind the large set of financial institutions such as BlackRock and Fidelity, who also submitted filings for their versions of spot Ethereum ETFs at the beginning of the year. This increased the number of people concerned with Ethereum ETFs after the SEC gave their green light to Bitcoin ETFs at the start of the year – a possible factor to be considered in the recent regulatory stance towards crypto-related investment products.
In addition to the app, Bitwise issued a report that sought to establish a significant connection between the ETH spot market and the CME ETH future market. As Bitwise reports, that correlation closely coincides with the US SEC results, which they cited as the main reason for approving a spot Bitcoin ETF. The purpose of the asset manager’s analysis would be to convince the SEC of the viability and need for a spot Ethereum ETF, which has been proven to have a solid and predictable market.
The regulatory environment remains to be seen despite these initiatives. The SEC’s speculated plans to set Ethereum as a security may dramatically affect the approval process for the latter’s ETFs. With the possibility of regulatory difficulties, some industry heads, including BlackRock CEO Larry Fink, are optimistic that launching a spot-based ETF is possible. Still, it may happen with the designation of Ethereum as a security.
Unfortunately, the window for a spot in Ethereum ETF to receive a nod of approval is not very bright, given that experts like Nate Geraci have predicted a low possibility of approval in the coming days. This doubt is not only pushed by political opposition to cryptocurrency ETFs but also the fact that several lawmakers have urged the SEC to certify them with caution.
Advertisement
As the situation progresses, the crypto and investment communities look closely forward to the SEC’s next steps. The success of Bitwise’s spot Ethereum ETF could significantly impact the environment of cryptocurrency investments and provide a more extended opportunity for investors to capture the upside of digital assets indirectly through conventional legal instruments.
