This is the big day for ETH and crypto community, as SEC decisions on whether ETH ETFs goin to pass
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Joe Lubin, co-founder of Ethereum and CEO of Consensys, made a statement about ETFs in an interview.
After months of anticipation, the Securities and Exchange Commission (SEC) appears ready to approve spot Ethereum exchange-traded funds (ETFs), setting the stage for a significant increase in demand for Ethereum (ETH) that could lead to a supply shortage.

Ethereum Co-Founder Predicts Supply Squeeze With Potential Approval of Ethereum ETFs
Joe Lubin, co-founder of Ethereum and CEO of Consensys, made a statement about ETFs in an interview.

Lubin explained that institutions investing in Bitcoin through recently launched ETFs are likely to diversify their holdings with Ethereum once spot Ethereum ETFs receive approval.

“There will be a fair amount of natural, pent-up pressure to buy Ethereum through ETFs,” he said. However, this demand may face a more limited supply compared to the Bitcoin ETFs approved earlier this year.

In January, when spot Bitcoin ETFs were approved, authorized participants — the firms responsible for purchasing Bitcoin on behalf of the ETFs — were able to easily purchase idle coins available on exchanges or through over-the-counter transactions.

However, the situation with Ethereum is different. On-chain data shows that more than 27% of the total Ethereum supply is currently staked on the Ethereum network, generating returns for holders and therefore kept out of direct circulation.

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“The bulk of Ethereum is used in the core protocol, DeFi systems, or DAOs,” Lubin said, referring to decentralized autonomous organizations.

This locked supply, combined with Ethereum's market dynamics, could make Ethereum's price more sensitive to expected inflows from ETFs.

Moreover, increased activity on the Ethereum network will trigger the burning of some of the existing Ethereum supply over time, further tightening the current supply. The deflation mechanism introduced by Ethereum's EIP-1559 upgrade contributes to scarcity by systematically reducing the supply of Ethereum in circulation.

The scenario for Ethereum ETFs could parallel or even exceed the supply pressures faced by Bitcoin ETFs.

Lubin emphasized the broader significance of this development, calling it a “profound turning point” for Ethereum and the cryptocurrency industry as a whole.

*This is not an investment recommendation.
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Sources familiar with the matter said the Biden administration is pushing Ethereum ETFs to earn Brown points ahead of the 2024 presidential election.
Ethereum (ETH) and the broader cryptocurrency markets have recently jumped on hopes that an Ethereum ETF will be approved this week.
The price of Ethereum (ETH) has crossed $3,800, registering a gain of more than 30% in the past two days alone. However, everyone is asking why the US SEC rushed through the 19b-4 filing. There is talk that the decision to rush the Ethereum ETF is more political than regulatory.
Spot Ethereum ETF at the Center of U.S. Politics
Until last week, the US SEC was unwilling to engage with issuers on the Opportunity Ethereum ETF, however, this week it has taken a sudden 180-degree turn.
“It’s a completely unprecedented situation, which means it’s completely political. They’re not even internally integrated yet, which is why it’s a political decision.
Other sources also said that with the US presidential election approaching later this year, it could also be politically motivated. Over the years Biden has built his reputation for cracking down on the crypto market.
On the other hand, former President Donald Trump has taken a pro-crypto stance and is willing to accept donations in crypto. “
The problem is that Democrats urgently need young voters to vote for them. Biden’s campaign strategy is focused on portraying himself as a future-looking senior citizen,” the source said. told Sources added that President Joe Biden could benefit if the SEC approves spot ether ETFs.
Expert’s Take on the Matter
Some crypto industry experts believe the SEC’s 180-degree shift this week isn’t entirely politically motivated. ETF Store President Nate Geraci said the SEC is always preparing to approve the spot Ethereum ETF.
The securities regulator approved the Ether Futures ETF last October 2023 from ProShares, VanEck and Bitwise, thus setting the stage for spot products.
Once the SEC approved ether futures ETFs, it potentially sealed the fate of the resulting approval for spot ether ETFs,” Geraki said.
On the other hand, some Bitcoin maximalists are getting real bad at the SEC considering approval of an Ethereum ETF in one place. Popular Twitter handle, Bitcoin Therapist noted :

If the SEC approves an Ethereum ETF it will be an indication the market is not regulated by competent actors. Ethereum is literally a speculative platform for gambling on centralized shitcoins. This will pave the way for a shitcoin casino embedded into the SEC.

Coinbase’s Chief Legal Officer, Paul Grewal asserted that the current bill challenges the SEC’s recent assertion that all cryptocurrencies except Bitcoin meet the Howey Test criteria for securities.
Grewal emphasized that the bill does not eliminate the industry but rather addresses what he sees as a flawed regulatory landscape.
Note that there is no clear timeline for spot ether ETF approval. However, current developments suggest they could reach early August to late July.

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