Recently, two US Senators, Jack Reed and Laphonza Butler, raised concerns about the approval of crypto ETF proposals, specifically focusing on Ethereum. They pointed out the lack of sufficient trading volumes and integrity in cryptos like Ethereum, which could pose risks for retail investors. The Senators advised the SEC to tighten its scrutiny on Bitcoin ETFs and limit the approval of ETFs referencing thinly traded cryptocurrencies.
Bloomberg Analysts’ Perspective
Bloomberg analysts have significantly lowered the probability of a spot Ethereum ETF approval to 35%. Eric Balchunas, Senior ETF Analyst at Bloomberg, attributes this pessimism to the success of Bitcoin ETFs, which may have unsettled some politicians. This decreasing probability adds more uncertainty to the future of Ethereum ETF approvals.
Coinbase’s Legal Chief’s Insights
Paul Grewal, the legal chief at Coinbase, emphasized the market quality metrics of digital assets like Ethereum surpassing even the most substantial traded equities. He argued that Ethereum’s future and spot market demonstrate high and consistent correlation, enabling effective market surveillance. Grewal believes that the SEC’s refusal of an Ethereum ETF application would be based on flawed reasoning, considering the robust market performance of Ethereum and similar digital assets.
The future of Ethereum ETF approvals remains uncertain as regulatory scrutiny and concerns from lawmakers continue to impact the decision-making process. While some Senators advise caution and limitation in approving crypto ETFs, others like Coinbase’s legal chief argue for the market quality and correlation of digital assets like Ethereum. As the debate continues, retail investors wait for a clearer path forward in the world of crypto ETFs.
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