The Roadblocks to Ethereum ETF Approval
There are several roadblocks that hinder the approval of spot Ethereum exchange-traded funds (ETFs). These obstacles include concerns about the proof-of-stake (PoS) mechanism, risks of price manipulation, and securitization concerns.
- 55% of ETH supply is held by 1,041 addresses with over 10,000 ETH each
- Retail traders own less than 45% of ETH
- Major holders can heavily influence ETH network upgrades due to their stake in voting rights under PoS
- The Securities and Exchange Commission (SEC) has expressed concerns about the concentration of control or influence by a few individuals or entities
- Bitcoin (BTC) holders lack voting rights and have a more even distribution
- About 40% of BTC supply is owned by whales
- About 2,100 whale addresses hold BTC as of March 2024
This discrepancy between ETH and BTC ownership reduces the potential for price manipulation in BTC compared to ETH.
Ethereum Options Data Doesn’t Support ETF Approval
In the options market, there has been a notable surge in both BTC and ETH far-month option skewness following the announcement of spot BTC ETF applications. However, the announcement of spot ETH ETFs did not prompt option traders to factor in additional bullish sentiment.
The rise in far-month skewness in February is likely attributed to liquidity return rather than the ETF news, according to BioFin. The final decision on the approval of spot ETH ETFs will not hinder the potential breakthrough of ETH price, regardless of the outcome.
BlackRock’s Efforts to Enhance Cryptocurrency ETF Offerings
BlackRock, one of the top industry players, has appointed Matt Kunke as their Digital Assets Product Strategist. This move highlights BlackRock’s efforts to enhance its cryptocurrency ETF offerings for its customers.
Ethereum Price Surge and Upcoming Dencun Upgrade
The price of ETH has once again surged past the crucial milestone of $4,000. The Ethereum community is also preparing for the Dencun upgrade, which is expected to further drive price gains.
Hot Take: Uncertainty Surrounds Approval of Spot Ethereum ETFs
Despite the initial optimism surrounding the approval of spot Ethereum ETFs, there are significant roadblocks that reduce the likelihood of approval. Concerns about the PoS mechanism, price manipulation risks, and securitization concerns have dampened the overall optimism in the market.
While BTC holders lack voting rights and have a more even distribution of ownership, ETH holders with significant stakes can heavily influence network upgrades. The SEC has expressed concerns about the concentration of control or influence by a few individuals or entities in the Ethereum ecosystem.
In the options market, there has been a surge in BTC and ETH far-month option skewness following the announcement of spot BTC ETF applications. However, the announcement of spot ETH ETFs did not generate additional bullish sentiment among option traders.
BlackRock’s appointment of Matt Kunke as their Digital Assets Product Strategist shows their commitment to enhancing their cryptocurrency ETF offerings.
The price of ETH has surged past $4,000 once again and is expected to continue gaining momentum with the upcoming Dencun upgrade.
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