Bitwise Joins Race For Ethereum Spot ETF

Bitwise Joins Race For Ethereum Spot ETF

The US Securities and Exchange Commission (SEC) has already received several applications for a spot Ethereum ETF.

Bitwise became the latest company to enter the race for the same, as the crypto investment firm submitted its own application.

There is an increasingly crowded field of firms aiming to launch the first Ethereum spot ETF in the market, after the successful launch of spot Bitcoin ETFs earlier this year.

The filing

Bitwise filed the S-1 registration form in which it proposed the ‘Bitwise Ethereum Trust’, which would hold the crypto token and may also stake a portion of the assets of the fund for generating additional rewards.

It mentioned that trusted staking providers would be used for this purpose. The practice of staking has been scrutinized and even criticized by government regulators.

It involves locking up the ETH token to help secure the Ethereum network and for validating transactions, with rewards generated in the form of newly minted ether tokens.

The entry of the crypto investment firm in the Ethereum spot ETF race comes at a time when traditional financial firms are also taking an increasing interest.

Ethereum spot ETFs

In recent months, digital currency investment firm VanEck and Grayscale, along with asset management behemoth BlackRock have all submitted their respective proposals to the SEC for launching spot Ethereum ETFs.

The rise in competition highlights the increasing demand for such products, as investors want to gain exposure to the second-largest crypto token without having to buy or hold it directly.

The filing from Bitwise came after a company executive predicted that approval for spot Ethereum ETFs would not be granted this summer, something many expect to happen.

The executive also asserted that it would likely occur later in the year. Chief Investment Officer at Bitwise, Matt Hougan, said that a launch in December was better than one in May.

He stated that it would help in gathering more assets, as TradFi requires more time to digest the Bitcoin ETFs.

The regulator

Recent months have seen the SEC delay its decisions on many high-profile spot Ethereum ETF applications.

These include those filed by Grayscale, BlackRock, Galaxy Digital, Invesco and Fidelity. Analysts, such as James Seyffart of Bloomberg, had initially predicted that delays would continue until May 23rd.

This is the deadline for the earliest applications that were submitted by Cathie Wood’s ARK Invest and VanEck.

However, the analyst now believes that the applications are likely to be denied. But, some experts are still optimistic about the prospects for spot Ethereum ETFs, despite the delays.

Standard Chartered, the British multinational bank, believes that the SEC would approve such products by May.

The bank said that this was because the regulator had not categorized ether as a security. It also predicted that the price of the crypto token could hit $8,000 by the year-end.

By 2025, it expects the price of ether to touch $14,000, partly driven up by the anticipated approval of the spot Ethereum ETFs.