The Interesting Reasons For Ethereum ETFs

Todd Moses
May 14, 2024

While the Securities and Exchange Commission (SEC) mulls over the decision to allow Ethereum ETFs, crypto exchange Coinbase (NASDAQ: COIN) went offline for three hours.

Inputs that matter: Coinbase returned at 07:42 UTC with a message on its status page, "We are aware that some users may be experiencing delayed sends for assets on the Ethereum network (ERC-20s)."

  • Despite today's setback, shares of COIN are moving upward.

The opportunity: Meanwhile, cryptocurrency investors are not expecting the SEC to approve any spot ether exchange-traded funds this month or anytime soon.

  • The SEC has final deadlines on May 23 and May 24 to decide on VanEck and ARK's applications for ether (ETHUSD) ETFs, respectively.
  • Bloomberg's Eric Balchunas highlighted the formidable regulatory challenges faced by Ethereum ETFs compared to Bitcoin, notably probing the Ethereum Foundation's centralized impact on the token.
  • Ethereum (ETH) isn't Bitcoin (BTC)—it has layers of complexity, making it hard to determine where the SEC stands.

Zoom in: The U.S. regulator approved several Bitcoin ETFs in January after a federal court in August ordered the SEC to vacate its rejection of Grayscale Investments' application to convert its Bitcoin Trust product into an ETF.

  • "We do think that as long as Gary Gensler chairs the SEC, any advancement in the digital-asset space is going to have to come through the judiciary channels" Mark Connors, director of research at 3iQ Corp, said in a phone interview.

Between the lines: The question of whether the SEC has jurisdiction over Ethereum has come to the forefront over the past few weeks, as reports have revealed that the agency is subpoenaing companies that deal with the Ethereum Foundation.

  • Consensys has argued that past SEC officials have said Ethereum is not a security, pointing to a 2018 speech from William Hinman, the SEC's Director of the Division of Corporation Finance.
  • However, Bitcoin Guide and other investors on X point to the fact that Ethereum had an ICO maintains a command center, and has an acting CEO, something very similar to a public company.

Follow the money: The bitcoin price has topped its previous all-time high of around $70,000 per bitcoin, helping the combined Ethereum, XRP, and crypto market soar to around $2.5 trillion.

  • One analyst predicts former U.S. President Donald Trump and the Federal Reserve could be about to trigger a massive bitcoin price boom.
  • Now, as Elon Musk and others issue warnings that the U.S. dollar could be heading for collapse, some of Wall Street's biggest banks have revealed they're testing a system with Visa and Mastercard to tokenize their assets—something Citi analysts predict could become a "$5 trillion market by 2030."
  • Meanwhile, the State of Wisconsin bought over $100 million in Bitcoin.

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Read More

  1. https://status.coinbase.com/
  2. https://finance.yahoo.com/quote/COIN/
  3. https://www.coindesk.com/business/2024/05/14/coinbase-reports-system-wide-outage/
  4. https://99bitcoins.com/ethereum-etf-approval-will-the-sec-reject-or-accept-eth-next-week/
  5. https://www.morningstar.com/news/marketwatch/2024051376/ether-etfs-are-unlikely-to-arrive-this-month-get-ready-for-more-legal-battles-ahead
  6. https://www.theblock.co/post/291477/consensys-alleges-sec-was-considering-over-a-year-ago-that-ether-may-be-a-security
  7. https://twitter.com/jo5e_neto/status/1790368240444596510
  8. https://www.theblock.co/post/294274/vitalik-buterin-eip7706-ethereum-calldata-gas
  9. https://www.cnbc.com/video/2024/05/13/why-ethers-supply-growing-again-what-means-for-investors-cnbc-crypto-world.html