Ethereum
How certain is SEC approval of an ether ETF?
The Securities and Exchange Commission (SEC) is quickly approaching its Thursday deadline. whether to approve an ether ETF. Prices of cryptocurrencies including Ethereum (ETH-USD), have been rallying this week to the hopes of a new investment offer, following in the footsteps of the bitcoin spot (BTC-USD) ETFs will get the green light in early 2024.
Matt Ballensweig, BitGo Go Network Lead and Managing Director, Joins Asking for a Trend Host Josh Lipton to explain his confidence that the SEC will eventually approve an ether ETF and what demand for such a product might look like.
“There appears to be, I think, an intentional pivot by the current administration to actually signal support for digital currencies. We saw the Senate strike down SAB 121 last week, which would have made it very difficult for banks and large traders to hold cryptocurrencies on their balance sheets,” explains Ballensweig. “Obviously this still has to go through the president, but there was also overwhelming approval yesterday in the House of Representatives for the Financial Innovation and Crypto Technology for the 21st Century Act. [FIT21] which had the support of both Democrats and Republicans.
For more expert insights and the latest market action, click here to watch this full episode of Asking for a Trend.
This message was written by Luke Carberry Mogan.
Video transcription
Spot Ethereum, ETF S. Matt.
What do you think?
Will they get the green light?
Thank you very much for inviting me.
Um, it’s great to be here.
I think they’re going to get the green light here.
I mean, I will say, um, you know, I’m actively watching Crypto Twitter as we speak and I’m hearing rumors that this could happen.
Um you know, just after 5 p.m.
I’ve heard other reports that it might take a few more hours, but all, all signals point to this being approved today.
Can I tell you, Matt, if this is approved?
I was completely wrong because I really thought I was interested in your opinion.
I was really thinking of Se C President Gary Gensler.
I mean, he didn’t want this Bitcoin ETF spot.
He had to be trained there.
Matt, it took a trial.
Honestly, I thought it was going to take another trial.
If you were to give the green light to an ETF position, you might have seen it differently.
Matt, look, I’m going to, I’m going to say this from a trader’s perspective and, and from the institutional side of crypto, I think we’ve all been very, very shocked at how quickly things have developed this week.
Um, you know, especially just in terms of knowing the pace at which the Bitcoin ETF, uh you know, has been going.
So hearing the news earlier this week that the SEC was requiring some of these ETF issuers to amend 19 4 filings for one-time ETF approval was very, very surprising and not at all taken into account by the market.
The story continues
I mean, the theory was trading around 3,000 and immediately shot up to 3,700.
Um, you know, and it’s not just about the approval of the E ETF, but you know, there seems to be, I think, an intentional pivot on the part of the current administration to actually signal a support for digital currencies.
We saw the Senate overturn SAAB 121 last week, which would have made it very difficult for banks and large brokers to hold crypto on their balance sheets. Obviously, this still has to go through the president.
Um, but there was also overwhelming approval yesterday in the House of Representatives for the 21st Century Financial Innovation and Crypto Technology Bill, uh, which had support from both Democrats and Republicans .
So you know Baton is now in the Senate, but whatever the catalysts are.
Um, you know, it’s becoming clear that I think Congress wants to be on the right side of history here.
Um, and that we’re really at the forefront of this movement with, you know, innovations in finance and technology on a global scale, as we always have been.
So I think it clearly matters to voters.
Um, we also have an election coming up.
So, you know, whatever these catalysts are, I think everyone in the institutional crypto world is very surprised at how this has progressed.
Um But, but very happy and Matt, let’s say you see the point, if your S ETFs get the green light, they’re approved.
What do you think about Matt pulling out the crystal ball?
What do you think the demand looks like?
And where do you think the demand comes from?
Yeah, that’s a great question.
I mean, I think you can use, you know, the Bitcoin ETF as a proxy and sort of, you know, as a guide to understanding this at some point.
And if you just look at the flows of the Bitcoin ETF over the first few months of trading, you know, it’s been a funnel of capital into the ecosystem.
Um, we’ve seen, I think we’ve seen 1.1 billion net streams in the last five days alone.
Um, and about 13.5 billion in net new demand overall for this asset.
Um, so there’s obviously a huge institutional demand pool, uh I think, you know, demand pool there and you know, Ethereum is going to be something similar to that, you know, that, maybe that it will be a fraction of that.
Um, but obviously, I think there are a lot of interested parties who now have the rails in place to add Ethereum into their portfolio.
Um, but it’s even more important than just being, you know, the actual channel of capital into the asset.
I think it’s really the initiation of a whole new class of investors who are learning about the ecosystem.
Um, you have people, you know, you’ve had people like Larry Fink, right, explaining the value of Bitcoin as a decentralized, straight, non-sovereign, internet-based, inflation-resistant currency and what it means.
And now, you know, investors are going to have to go a little deeper down the rabbit hole to understand.
Well, what about the Ethereum ecosystem?
You know, what is, what is a smart contract for programmability?
How did decentralized exchanges work?
You know, what are the other alternative layers?
And how do you balance things like consensus and speed?
So all of these questions that you know, we in the institutional crypto world have been exploring for some time, will now become mainstream.
And I think this will be a huge benefit not only to e, but to many other layer 1 protocols in the space.
Um, you know, as time goes on and I think we’re going to see a lot of capital come into the crypto crypto ecosystem as a result of this approval of the Ethereum spot ETF and Matt, I’m going to get you out of here at this subject.
Let’s say we do the, we see a spot Ethereum ETF approved, it gets the green light.
How does this impact and influence the price of Ethereum Matt?
In your opinion ?
I mean, in 12 months.
Give me a target.
Yeah, every 1212 months.
Um, I think, I think we will, will definitely be a challenge if it doesn’t reach unprecedented heights.
Um, it wouldn’t shock me to see a handful of 5000, uh, in 12 months.
Um, so I’ll, I’ll, I’ll stick to that.
Mast.
Thank you so much for joining the show today.
It was great.
I appreciate your time.
My pleasure.
Thank you very much for inviting me.