Decoding ETF Dynamics: Expert Insights on ETH Approval Odds, Industry Forecast Post-ETH ETF Approval

On January 11th, 11 BTC ETFs were approved, sparking a revival in the crypto market. Besides signaling positivity to the market, BTC ETFs have also brought in additional funds to the industry. According to SosoValue data, as of March 1st, the total net asset value of Bitcoin spot ETFs stood at $48.22 billion, with an ETF net asset ratio (market value as a percentage of total Bitcoin market value) of 3.91%. The historical cumulative net inflow has reached $7.35 billion.

The impressive performance of BTC ETFs over the past 53 days has boosted market confidence, while simultaneously raising hopes for another milestone in the crypto sphere – the approval of ETH ETFs.

According to Bloomberg data, the final decision date for the spot ETH ETF “VanEck Ethereum ETF” is set for May 23rd, making it the earliest one. Currently, there are a total of six spot ETH ETFs awaiting the SEC's verdict.

Industry Experts' Perspectives on the Probability of ETH ETF Approval

Jake Chervinsky, Chief Legal Officer at Variant Fund, believes that the approval of spot Ethereum ETFs is uncertain. Chervinsky stated, “I'm not saying a spot ETH ETF won't be approved before May 23rd.” “I'm just saying that legal issues and policy environment in Washington D.C. make the possibility of rejection (or SEC-requested withdrawal) much greater than general sentiment implies. 'BlackRock always wins' is a lazy bull market view.”

Cryptocurrency market-making firm GSR's research analyst, Matt Kunke, stated, “We anticipate the approval of Ethereum spot ETF in May, with an estimated probability of 75%.” “This optimistic outlook is based on Grayscale's victory in the appellate court and subsequent approval of Ethereum futures ETF, all indicating that the approval of spot Ethereum ETF is just a matter of time.”

Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, predicts a 70% chance of Ethereum ETF approval this year.

Implications of ETH ETF Approval

Due to differences in positioning, market capitalization, and the number of ETF applicants, the impact of ETH ETF approval on the industry would certainly differ from that of the approval of 11 BTC ETFs.

Firstly, an influx of capital is inevitable. Brett Tejpaul, Head of Institutional at Coinbase, stated in an interview that their clients have shown interest and enthusiasm for spot Ethereum ETFs. He also pointed out that many leaders have expressed the value they see in such products being listed.

Furthermore, within the entire crypto market, BTC's market dominance stands at 53.2%, while ETH's market dominance is at 17.4%. The dominant position of BTC in the crypto market, coupled with Ethereum's unique functionalities and continuously evolving ecosystem, cannot be overlooked. Ethereum and its native currency ETH serve as the backbone for a plethora of decentralized applications and innovative projects. From smart contracts to DeFi and NFTs, the Ethereum ecosystem will continue to drive unprecedented use cases and levels of activity.