Potential Delays Expected for Approval of Spot Ethereum ETFs
The approval process for spot Ethereum ETFs may face delays beyond the final deadline in May, according to Robby Greenfield, CEO of smart money protocol Umoja. Large financial institutions are encountering challenges in developing internal strategies to position themselves for approval, leading to this potential delay.
Greenfield emphasized the difficulties institutions face in leveraging market-manipulating functions with cryptocurrencies like Bitcoin and Ether, unlike with previous commodities. The inability to create “paper Bitcoin” similar to traditional commodities like gold complicates their approach.
Several prominent companies, including BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton, are competing for Ethereum ETFs. Bloomberg ETF analyst James Seyffart predicts that the current Ether ETF approvals could face declination by late May, as stated in a March 19 report. The United States Securities and Exchange Commission (SEC) recently postponed its decision on Hashdex and ARK 21Shares’ spot Ether ETFs. Both applications will await a final decision by late May.
The decentralized nature of cryptocurrencies like Ether poses challenges in creating institutional strategies for ETFs, contributing to potential delays in approvals. Despite this, Greenfield believes that Ether ETF approvals are inevitable, whether in May or later in the year. He emphasized the SEC’s evolving perspective on Ether as a commodity rather than a security, which could pave the way for approvals.
Optimism and Growth in Retail Access
The SEC has impending decisions on various Ethereum ETF applications, including VanEck’s by May 23, ARK 21Shares’ by May 24, Hashdex’s by May 30, Grayscale’s by June 18, Invesco’s by July 5, Fidelity’s by August 3, and BlackRock’s by August 7. In addition to spot Ether ETFs, large institutional players remain cautious about investing in decentralized finance (DeFi) due to infrastructure limitations.
Greenfield noted that institutional capital hesitates to enter DeFi without established processes and guarantees, while retail investors seek a more user-friendly experience. He emphasized the importance of enabling retail access to smart investment strategies, considering that retail investors account for 52% of global assets under management. To facilitate this access, Umoja recently concluded a $2 million extension to its initial seed funding round, bringing the total funding to $4 million.
This move aligns with projections by the World Economic Forum, which estimates that retail investors will contribute to 61% of global assets under management by 2030. The approval of spot Ether ETFs may face potential delays, but industry experts like Greenfield remain optimistic about eventual approvals, driven by the evolving regulatory perspective and the growing demand for retail access to investment opportunities in the cryptocurrency market.
