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Tuesday, May 28, 2024

Here’s Why Bitwise CEO Wants the SEC to Postpone Approval of Ethereum ETFs

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Bitwise Asset Management, a provider of cryptocurrency index funds, wants the U.S. Securities and Exchange Commission (SEC) to defer approval for a spot Ethereum Exchange-Traded Fund (ETF) until December.

Bitwise Chief Investment Officer Matt Hougan told Forbes in an interview that the industry’s focus on Bitcoin-related products may hinder the necessary attention required for the development and approval of an Ethereum ETF.

Spot Bitcoin ETF Success and Market Readiness

The move comes in the wake of the company’s achievement with the Bitwise Bitcoin ETF (BITB), introduced on January 11, amassing over $2 billion in assets under management, positioning it as the fifth largest in the market.

Hougan reflected on the rapid growth of such financial products, “These spot Bitcoin ETFs are the fastest-growing ETFs of all time by a large fraction,” he remarked.

He further highlighted the diverse investor groups expressing interest, encompassing retail investors, independent financial advisors, hedge funds, venture capital funds, family offices, and corporate entities. He emphasized that the market’s enthusiasm for spot Bitcoin ETFs has surpassed initial forecasts, signaling a demand for crypto-focused investment instruments.

However, despite the success of spot Bitcoin ETFs, Bitwise believes that Ethereum deserves equal attention. Hougan expressed confidence in the Ethereum ecosystem’s potential for growth, particularly with recent upgrades like the Dencun upgrade, which he views as a catalyst for a surge in innovative applications. He emphasized the need for investors to broaden their horizons beyond Bitcoin and recognize Ethereum’s significance.

In discussions about the potential spot Ethereum ETF, Hougan believes that postponing approval would provide a better opportunity for traditional finance to get used to spot Bitcoin ETFs and make it easier to embrace ETH offerings. Bitwise recently submitted an application for a spot Ethereum ETF to the SEC on March 28, 2024.

NFTs, Equity Products, and Institutional Adoption

Hougan also gave insights on various aspects of the crypto space. He discussed the potential of non-fungible tokens (NFTs), emphasizing their role as a late-stage derivative of crypto wealth and the growing maturity of such projects.

He also provided perspectives on equity products like BITQ and BWEB, detailing the differences between them and shedding light on their approach to the mining space. He shared insights into MicroStrategy’s role as a leveraged player on Bitcoin and identified underappreciated projects such as Render and Immutable in the crypto market.

Lastly, he mentioned the early stage of crypto adoption, noting that significant opportunities remain untapped, particularly in the institutional investor space.

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