Bitwise investment chief Matt Hougan is optimistic about the firm becoming a key player in the Ethereum ETF space. The firm recently filed an application with the SEC to launch a Spot Ether ETF, aiming to replicate the success seen with recent Spot Bitcoin ETFs. The proposed “Bitwise Ethereum Trust” would directly own Ethereum and leverage staking services to generate returns. Hougan hopes for an approval in December instead of rushing to launch in May, as he believes it would strategically benefit the firm.
Despite the recent Dencun upgrade of Ethereum, Hougan acknowledges the challenge of attracting the attention of financial advisors to the asset. He notes that it is difficult to shift the focus away from Bitcoin, as professional investors are primarily interested in that asset. However, with a renewed interest in US spot Bitcoin ETFs, there is potential for Ethereum to gain more recognition in the market. Ten approved spot Bitcoin ETFs generated $418m on March 26, marking a reversal from sustained outflows.
Hougan advocates for a gradual introduction of Ethereum ETFs to cater to the evolving interests of the crypto investor base. He predicts that Bitcoin will initially serve as the entry point, followed by a desire for diversification into other assets like Ethereum. Despite Bitwise’s Ryan Rasmussen projecting a 50% chance of approval for a Spot Ether ETF by May, Hougan believes that a December launch would be more strategically advantageous. He suggests that giving traditional finance time to digest Bitcoin before introducing Ethereum would better prepare them for the next wave of products.
The market consensus is that an Ethereum ETF approval in May is a possibility but unlikely. Hougan remains confident in Bitwise’s chances of securing an Ether ETF approval eventually. While there is anticipation for a May approval, he believes that giving traditional finance more time to become comfortable with Bitcoin and crypto would pave the way for a smoother adoption of Ethereum ETFs. The recent success of spot Bitcoin ETFs from major players like BlackRock and Fidelity signals potential growth in the ETF space for other cryptocurrencies like Ethereum.
Overall, Hougan’s strategic approach and confidence in Bitwise’s success in the Ethereum ETF market suggest a carefully planned entry into the space. By considering the timing of the launch and market dynamics, he aims to position Bitwise as a key player in offering diversified investment options to investors. With the growing interest in crypto assets and ETFs, the potential for an Ethereum ETF approval and subsequent market entry presents an exciting opportunity for Bitwise and investors looking to diversify their portfolios.
