VanEck Believes Ethereum ETFs Could Surpass Bitcoin ETFs
American investment management firm VanEck predicts that spot Ethereum exchange-traded funds (ETFs) could outperform similar Bitcoin products once they are approved by the United States Securities and Exchange Commission (SEC) in the near future. Pranav Kanade, portfolio manager of VanEck, expressed this belief in a recent interview. He stated that Ethereum ETFs could attract even more demand than Bitcoin ETFs due to the market size of Ethereum, which is as big, if not bigger, than Bitcoin.
However, some members of the crypto community disagree with Kanade’s opinion. They argue that Ethereum ETFs may not make much sense because these products may not allow for staking reward distribution. It is worth noting that Ethereum transitioned into a Proof-of-Stake protocol in 2022, allowing ETH holders to earn diverse yields by staking their assets on the blockchain. Market analysts suggest that crypto investors should buy and stake their own ETH rather than invest in ETFs. Despite this, Kanade stands by his belief.
Kanade argues that there is a massive world of investors who are looking for cash-producing assets, and Ethereum is one such asset. Even without an ETF that offers staking as part of its features, Ethereum still generates fees that go to token holders. Therefore, Kanade believes that ETH could make more sense as an asset to more people than Bitcoin does.
While Kanade believes that Ethereum ETFs could surpass Bitcoin funds, he acknowledges the significant challenge ahead. The spot Bitcoin ETFs have already seen inflows exceeding $11 billion within just two months of their launch.
In addition to his prediction about the potential success of Ethereum ETFs, Kanade also provides his assessment of the likelihood of SEC approval for these products. He places the odds at 50%, which contradicts Bloomberg analysts’ prediction of 30%. This is noteworthy considering that the SEC was legally compelled to approve the spot Bitcoin ETFs due to a court ruling involving Grayscale. It is unlikely that the agency is eager to approve similar products for Ethereum.
However, Hester Pierce, also known as Crypto Mom, a commissioner at the SEC, has expressed her belief that the regulator would not require a lawsuit or court order to approve pending applications for Ethereum ETFs. This indicates that there may be a more favorable stance towards these products within the agency.
Meanwhile, VanEck has recently reduced the management fee for its Bitcoin ETF, HODL, from 0.2% to 0% in an effort to attract more investors. The current fee structure will remain in place until March 2025 or until HODL accumulates $1.5 billion in assets under management.
In summary, VanEck believes that spot Ethereum ETFs have the potential to surpass Bitcoin ETFs once they receive approval from the SEC. Kanade argues that Ethereum’s market size and cash-producing nature make it an attractive asset for investors. Despite some skepticism within the crypto community and uncertainty surrounding SEC approval, VanEck remains optimistic about the future of Ethereum ETFs.
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