Samson Mow’s Critique of the Ethereum ETF Dilemma
In a recent analysis, Samson Mow, known as the “Bitcoin Maximalist” and founder of Jan3, expressed doubts and criticism regarding the likelihood of the US Securities and Exchange Commission (SEC) approving a spot Ethereum ETF. Mow’s critique delves into various aspects of the situation, including regulatory inconsistencies, Ethereum’s unique characteristics, and the speculative nature of its market dynamics.
Mow asserts that the approval or denial of an ETH ETF would have significant implications for the broader crypto landscape. He believes that both outcomes would be bearish for Ethereum, reflecting his skepticism towards ETH’s valuation and its position within the SEC’s regulatory framework.
One aspect that Mow highlights is the regulatory conundrum faced by the SEC. He points out that by approving ETH futures, along with BTC futures, the SEC has set a precedent that logically requires them to approve an ETH spot ETF for similar reasons. This observation adds complexity to the decision-making process surrounding the Ethereum ETF.
Mow also raises questions about Ethereum’s design, particularly its staking mechanism and pre-mine. He challenges conventional definitions of commodities by asking what kind of commodity generates a yield, prints 70% of its supply out of thin air, and tweaks its own monetary policy at will. These questions highlight the difficulties in categorizing Ethereum within existing regulatory and investment frameworks.
The critique extends to the speculative nature of ETH’s price movements. Mow attributes recent gains to hope for ETF approval rather than genuine capital inflows. Even if an ETF is approved, he predicts a downturn in ETH price because holders may sell their holdings. He specifically mentions Grayscale Ethereum Trust (ETHE), which holds 2.9 million ETH that would become redeemable upon approval.
Overall, Mow believes that whether an Ethereum spot ETF is approved or not, it will lead to selling pressure and a structurally defective market for ETH.
The Declining Odds of Approval
Bloomberg’s ETF expert Eric Balchunas has recently revised his odds for a spot Ethereum ETF approval in the US. He now puts the odds at 35%, reflecting a cautious stance based on the SEC’s historical positions and current signals from the agency.
At the time of writing, ETH is trading at $4,003.
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