Ethereum ETF Decision Recalls Bitcoin Launch in Spot

Cryptocurrency

Remember the launch of the bitcoin spot ETF?

As the Ethereum ETF approval drama unfolds, investors and observers of the exchange-traded fund industry may recall parallels between this case and the events that led to the eventual approval and unveiling of spot bitcoin ETFs.

In both cases, the Securities and Exchange Commission (SEC) initially showed caution in approving spot ETFs for these cryptocurrencies. However, pressure from multiple stakeholders, including issuers, investors, and the maturing crypto market, has spurred a potential move toward approval.

Both decisions reflect the growing recognition of the maturing cryptocurrency market and the rapid increase in institutional interest in these assets.

The presence of stain Bitcoin ETFand the potential approval of an ether-based ETF suggest that the SEC is considering growing investor demand for regulated ways to gain exposure to these cryptocurrencies.

A key difference between the two cases is that the Ethereum ETF approval process may be faster than that of Bitcoin due to the legal precedent set by the August 2023 Grayscale Court Casewhich effectively reversed the SEC’s initial rejection of the asset manager’s spot bitcoin ETF application.

Both cases highlight the complex path to approval and increased receptivity toward well-structured spot cryptocurrency ETFs.

Is a Dogecoin ETF Next?

In the first two days of trading this week, the popular cryptocurrency Dogecoin (DOGE) jumped 9% as investors began speculating that the largest meme coin by market cap could be next to be approved by a spot ETF.

Crypto Trader Andrew Kang tweeted to his 244,000 followers on Tuesday X, “the chances of a DOGE ETF look brighter than ever.”

While speculation about more spot ETFs isn’t surprising, it would be surprising if a spot DOGE ETF was next in line.

Cryptocurrencies with clear and demonstrably valuable use cases beyond speculation may be viewed more favorably. Additionally, a well-developed ecosystem with robust infrastructure for secure storage and transactions could be an advantage. Widespread acceptance, measured by higher market capitalization (total value of all coins in circulation) and higher trading volume (liquidity) can also be considered.

For example, there are five cryptocurrencies besides Bitcoin and Ether that have larger market caps than Dogecoin, according to data from CoiMnarketCap.com.

Behind Bitcoin and Ethereum, these are the biggest cryptocurrencies on the market:

• TetherUSDT (USDT): This stablecoin, with a market value of approximately $111 billion, is pegged to the US dollar and is a popular choice for investors seeking stability in the crypto market.

• BNB (BNB): The native currency of the Binance ecosystem, BNB, has a market cap of around $91 billion and is used for a variety of purposes on the Binance exchange and its blockchain applications.

• Solana (SUN): Solana, known for its fast transaction processing speeds, currently has a market cap of approximately $80 billion.

The story continues

Overall, the launches of spot Bitcoin ETFs and the increasingly likely approvals of spot Ethereum are positive developments, but they do not guarantee a flood of spot ETFs for more cryptocurrencies. The SEC will likely continue cautiously, prioritizing established cryptocurrencies with well-structured ETF proposals.

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