Ethereum spot ETF is about to be launched. What do institutions think about it?

Original | Odaily Planet Daily

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Since the U.S. Securities and Exchange Commission (SEC) approved the 19 b-4 filing for the Ethereum spot ETF on May 23, the market has been looking forward to the official launch of this product. SEC Chairman Gary Gensler recently said that the Ethereum spot ETF may be officially launched this summer. The DTCC official website has also listed the Ethereum spot ETF "INVESCO GALAXY ETHEREUM ETF SHS" (code QETH) jointly launched by Invesco and Galaxy, and the Create/Redeem column shows N.

With the statement made by SEC Chairman Gary Gensler, the launch time of the Ethereum spot ETF has become clearer: it will be approved as early as June 20 and no later than September 20 (US summer time).

What does the actual launch of the product mean for Ethereum, altcoins, and the crypto industry? Odaily Planet Daily has compiled the views of analysts and institutions on the launch of Ethereum spot ETF products in recent weeks.

Views from all sides

Bernstein analysts pointed out that the political background behind the SEC's approval of the Ethereum ETF has become less credible after Biden vetoed the SAB 121 repeal bill. They believe that the SEC's decision is more pragmatic to avoid legal disputes. Analysts also pointed out that the SEC may have considered the balance between market demand and legal challenges when approving the Ethereum spot ETF.

Jan van Eck, CEO of VanEck, said that there has been a major shift in crypto market sentiment, which is related to the SEC's approval of the Ethereum spot ETF's rule change. He believes that this is one of the most surprising things he has seen in securities regulation in his career. Eck pointed out that the SEC may lose jurisdiction over digital assets, so approving the Ethereum spot ETF is an important strategic adjustment.

Caroline Bowler, CEO of BTC Markets Pty, believes that the demand for Ethereum spot ETFs may be much lower than that for Bitcoin spot ETFs. She pointed out that Ethereum's popularity and market influence are not as good as Bitcoin, so the market demand for Ethereum spot ETFs may be limited. Bitcoin's market value is $1.4 trillion, three times that of Ethereum, which means that Bitcoin has a higher status in the minds of investors.

JPMorgan strategist Nikolaos Panigirtzoglou estimates that the Ethereum spot ETF will attract $1 billion to $3 billion in net inflows this year. He believes that this inflow will have a positive impact on the Ethereum market, although its scale may not be as large as that of the Bitcoin spot ETF. Panigirtzoglou also pointed out that Ethereum's technological advantages and wide application are the main factors attracting investors.

Eric Balchunas, senior ETF analyst at Bloomberg, said that Ethereum spot ETFs may find it difficult to obtain 20% of Bitcoin ETF assets. He believes that the appeal of Ethereum spot ETFs is limited to a certain extent by its market visibility and investor base. Balchunas also pointed out that although Ethereum spot ETFs will attract some capital inflows, the overall market impact may be limited.

Vetle Lunde, senior research analyst at K33 Research, is optimistic, predicting net inflows of $4 billion in the first five months, resulting in a "huge supply-absorbing shock." He believes that the launch of the Ethereum spot ETF will have a positive impact on the market, especially on the supply side. Lunde pointed out that as ETFs attract large investments, the market supply of Ethereum will be significantly affected, driving up the price.

Jag Kooner, head of derivatives at Bitfinex, said that the Ethereum spot ETF could attract 10-20% of the funds currently flowing into the Bitcoin ETF. The current inflow of the spot Ethereum ETF depends largely on whether the U.S. Securities and Exchange Commission will allow or refuse to clarify the staking of the spot Ethereum ETF in the future.

SEC Chairman Gary Gensler said that the timing of the listing of the spot Ethereum ETF depends largely on how quickly the issuer responds to the SEC's inquiries. The SEC still needs to approve the ETF issuer's registration statement, which details the information disclosure for investors. This process usually involves a lot of communication between the ETF issuer and SEC officials. The approval process for the spot Ethereum ETF is affected by many factors, including market demand, legal challenges, and SEC internal assessments. He emphasized that the SEC will complete the review of the S-1 document as soon as possible while ensuring market transparency and protecting the interests of investors.

Whether the Ethereum spot ETF has a pledge function may affect the future market upside

Combined with the above, the comments of various institutions and analysts have shifted from whether the Ethereum spot ETF can be approved to whether it can have a staking function. As the core function and source of income of the PoS public chain, the staking function has become the key to influencing market fluctuations after the approval of the Ethereum spot ETF. This has led to new market expectations of whether it has a staking function.

However, CryptoQuant data shows that from May 23 to June 2, CEX's Ethereum reserves decreased by 797,000, worth about $3.02 billion. This phenomenon shows that the market's expectations for Ethereum spot ETFs have led to a large outflow of Ethereum from exchanges.

And on June 12, Coinbase outflowed more than 336,000 ETH, setting a record for the highest single-day outflow this year, with a value of more than $1 billion. CryptoQuant analysis pointed out that if these withdrawals are not changes within the exchange, then this may indicate that Ethereum's long-term prospects are very optimistic. It is worth mentioning that CryptoQuant analysts also pointed out similar activities on Coinbase before the Bitcoin spot ETF began trading.

Such activities, to a certain extent, reflect the market's expectation for the rise in the price of Ethereum spot ETF after its launch. As for whether it has a pledge function, it may only be reflected in the magnitude of the rise. However, although the market and various institutions are full of expectations for Ethereum spot ETF, its official launch time still depends on the progress of the SEC's review of the S-1 document. It is expected that this summer will be a critical period, and the Ethereum market will usher in a new round of changes after the launch. Investors need to pay close attention to the SEC's dynamics and market reactions in order to adjust their investment strategies in a timely manner.