The emergence of spot Bitcoin Exchange Traded Funds (ETFs) has catalyzed a new wave of enthusiasm, evident in the rising trading volumes and overall market buoyancy that extends well beyond Bitcoin.

However, the debut of a comparable spot Ethereum ETF remains in limbo, as the US Securities and Exchange Commission (SEC) deliberates its approval. Nonetheless, industry connoisseurs maintain a positive outlook for Ethereum, the preeminent alternative cryptocurrency.

Positive Projections for Ethereum

Notably, a key event on the Bitcoin calendar is the forthcoming halving, expected to take place in April. Reflecting on the historical impact of such events, Matthew Sigel from VanEck, holding the position of Head of Digital Assets, has a sanguine projection for Ethereum’s future.

Although Sigel is skeptical about Ethereum overtaking Bitcoin in market dominance, an event known as the “flippening,” he predicts that Ethereum’s performance could surpass Bitcoin’s. In a discourse with CryptoQuant, he articulated:

“Over the medium term, ETH tends to outperform BTC in the halving year, right? So, notwithstanding the broader view, I doubt the flippening will transpire, but I am of the opinion that, by the end of the year, ETH will have exceeded BTC’s performance.”

The Stall in Spot Ethereum ETFs

Discussing the regulatory impediments encountered by the digital asset class in the US, the VanEck executive underscored the hesitation among banking and brokerage circles, a factor that complicates matters for crypto-related ETF listings.

This conservative stance by financial institutions has likewise impinged on efforts to launch ETFs linked to cryptocurrencies, with the SEC deferring its verdict on the approval of ETF proposals from investment giants like BlackRock and Fidelity. In his statements, he observed:

“The US authorities are reluctant to allow banks and brokerage firms to engage with these assets. This manifests in the distribution strategies of asset managers and financial advisors, with banks and bank-affiliated brokerages either dragging their feet or opting not to list these ETFs. While we anticipate changes in regulation down the line, it currently poses a notable challenge, and it serves as a reminder that this asset class is global and inherently counter to the US dollar.”

Sharing this perspective, Jake Chervinsky, Chief Legal Officer at Variant, a crypto enterprise, highlighted the political pressures and market volatility the SEC is contending with—factors that may influence its stance on spot Ethereum ETFs. Chervinsky’s remarks were captured in a recent article.