US-based applicants for a spot Ethereum (ETH) exchange-traded fund (ETF) have updated their filings with the U.S. Securities and Exchange Commission (SEC) as they await possible approval next week. In May 2024, the SEC approved a proposal from exchanges to list these products, but a separate approval is still required for their actual launch.
On July 9, Katherine Dowling, General Counsel and Chief Compliance Officer at Bitwise Asset Management, appeared on Bloomberg TV to discuss the firm’s spot Ethereum ETF application and the broader landscape for crypto products. Speaking with hosts Sonali Basak and Eric Balchunas, Dowling provided in-depth insights into the status of Bitwise’s application, the potential market impact, and the evolving regulatory environment.
Dowling began by highlighting the ongoing dialogue with the SEC. She explained that Bitwise has been in active discussions with the SEC about the potential for new products. Dowling acknowledged the historical challenges of bringing such products to market, particularly the absence of futures trading in some potential offerings. Despite these hurdles, she emphasized that the communication with the SEC has been positive and welcoming.
Addressing the interest from retail and institutional investors, Dowling noted that while Ethereum might be a more nuanced sell compared to Bitcoin, it is not necessarily a harder sell. She elaborated that Ethereum has a unique market structure that, although not as easily explainable as Bitcoin’s “digital gold” narrative, still holds significant appeal. Dowling mentioned that Ethereum spot ETFs could launch in the U.S. soon, with SEC Chair Gary Gensler indicating a summer timeframe.
We don't have a new over/under launch date yet because we haven't heard what the SEC's game plan is. Hope to hear soon. But if you forced me gun to head style to give my best guess for date I'd go with July 18th.
— Eric Balchunas (@EricBalchunas) July 8, 2024
When asked about marketing Ethereum to potential investors, Dowling highlighted Bitwise’s role as a research institution. She emphasized the importance of breaking down Ethereum’s technological innovations and business applications, likening them to the evolution of the internet. This approach, Dowling suggested, makes Ethereum more comprehensible and appealing to a broader audience. She stressed that these products are not just currencies but technological innovations that facilitate business operations on the blockchain.
With the impending launch of multiple spot Ethereum ETFs, Dowling discussed Bitwise’s strategy to stand out in a competitive market. She stated that Bitwise positions itself as a crypto asset specialist with years of experience trading and working exclusively within the crypto space. Dowling emphasized the importance of operational mechanisms behind the scenes, which ensure tighter trading spreads and better outcomes for investors. She argued that this specialization sets Bitwise apart from other well-known names entering the market.
While Dowling couldn’t speak to specific future products, she hinted at Bitwise’s proactive approach to meeting investor needs. She mentioned that Bitwise is continuously in conversation with institutional investors to understand their clients’ demands and to stay ahead of market trends. Dowling assured that Bitwise is committed to developing products that cater to the diversification needs of investors.
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