‘Ethereum ETFs will pull in more assets if they launch in December’ – Why?

• Odds of Ethereum ETF approval fall on the back of SEC’s latest updates
• Matt Hougan believes Ethereum ETFs should be launched in December for optimal asset attraction

The probability of Ethereum [ETH] Spot ETFs being approved has fallen, primarily because of the absence of updates in the public filings and limited engagement with the SEC. While there’s still a chance before May, the likelihood is falling as there’s been no evident progress in the approval process. 

However, many in the industry remain optimistic about an eventual approval, citing parallels with the Bitcoin ETF.  Echoing similar sentiments, Matt Hougan, CIO of Bitwise Asset Management, in conversation with Bankless, noted, 

“My view is that ultimately we will get an ethereum ETF. I think it’s probably the best shot on goal that the ETH world has had for a Bitcoin ETF was the new Fidelity update so I think we’ll eventually get it.”

ETFs timing dynamics

Hougan further highlighted that cryptocurrency ETF approval follows a 240-day review cycle, typically concluding in May – A crucial juncture for SEC decisions. He added,  

“I think Ethereum ETFs will pull in more assets if they launch in December than if they launch in May.” 

This idea stems from institutions still adjusting to the Bitcoin ETF launch. Therefore, launching towards the end of the year is seen as more practical, potentially leading to more assets being gathered.

Now, some execs have been comparing a potential Ethereum Spot ETF to just an opening act. In fact, they believe that an underwhelming Ethereum Futures performance is a negative indicator.

Contrary to the sentiment, however, Hougan said, 

“Ethereum ETFs will be way more successful than the Ethereum Futures”.

Looming concerns surrounding Ethereum ETF 

Despite not generating the same level of initial excitement as Bitcoin, the exec remains optimistic about the potential success of Ethereum ETFs. He foresees these ETFs attracting billions of dollars in their inaugural year, although their growth trajectory is expected to be slower compared to that of Bitcoin. 

“I think they’ll be very successful and you’ll have BlackRock and you’ll have Bitwise and you have others talking about Ethereum and real-world use cases.”

He added, 

“I think it’ll be broadly additive for the space, but I don’t think it’ll be $50 billion in year one, it’ll be billions. It’ll be a success.” 

According to Ryan Rasmussen, CEO of Bitwise, as Ethereum gains mainstream recognition and understanding, demand for Ethereum ETFs will grow, driven by the desire to capitalize on its transformative potential.

The SEC’s ongoing inquiry into Ethereum’s security classification and its decision on 23 May could significantly impact Ether ETF applications and Ethereum’s future trajectory.