Ethereum ETFs may capture only 15% of Bitcoin ETF assets, says Bloomberg analyst Ethereum ETFs may capture only 15% of Bitcoin ETF assets, says Bloomberg analyst
Asset management firm Fidelity has removed staking plans from its Ethereum ETF.
2 min read
Updated: May. 21, 2024 at 7:24 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bloomberg Senior ETF Analyst Eric Balchunas tempered the excitement over spot Ethereum exchange-traded funds (ETFs), suggesting they may attract only a fraction of the investments seen in Bitcoin ETFs.
On May 20, reports indicated a 75% chance that the US Securities and Exchange Commission (SEC) would approve an ETH ETF, starkly contrasting the previous pessimism surrounding the financial instruments.
The news spurred more than a 20% increase in ETH’s price, pushing it above $3,700, according to CryptoSlate’s data. Additionally, the blockchain analytical platform IntoTheBlock pointed out that this price spike pushed 90% of ETH holders to profit.
This bullish trend led some market analysts to predict significant inflows for ETH ETFs, akin to the success of BTC ETFs launched in January. Since the debut of spot Bitcoin ETFs in the US, these funds have amassed approximately $13 billion in assets under management, according to Farside Investors data.
However, Balchunas remains skeptical, estimating that ETH ETFs might only capture “10-15% of the assets of BTC ETFs.” He commented:
“I think me comparing Ether ETFs following Bitcoin ETFs to a concert where Sister Hazel comes on after Nirvana is probably why a few people [are] coming at me on this and that’s ok. Maybe that was harsh but I still see the Ether etfs getting 10-15% of the assets of the BTC ETFs.”
Fidelity removes staking
In parallel, Fidelity submitted an updated S-1 registration statement to the SEC for its proposed Ethereum ETF ahead of key deadlines.
The revised document has removed all traces of staking or staking rewards. Previously, the prospectus indicated the fund would stake some assets with a provider to earn rewards.
Analysts believe this change is due to the SEC’s scrutiny of crypto staking. The SEC has sued major exchanges like Kraken and Coinbase, alleging their staking products breach federal securities laws.
Balchunas added:
“Looks like you got a final answer as to whether SEC will allow staking: No. As this is first amendment of any document to roll in post-SEC 180 and their comments to issuers yesterday.”
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In this article
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Bitcoin
$97,364.84
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.
Fidelity Investments
Fidelity Investments Inc., commonly referred to as Fidelity, is a multinational financial services corporation based in Boston, Massachusetts.
Eric Balchunas is an American author, ETF analyst, and Senior ETF Analyst at Bloomberg Intelligence.