Introduction

The crypto industry has hit the mainstream. There is no denying that in the aftermath of the Securities Exchange Commission (SEC) approving Bitcoin ETFs, and the subsequent gold rush to purchase these novel financial products which has overrun the industry ahead of the April’s fourth Bitcoin halving, in which the miner reward will be cut from 900 bitcoins daily to only 450. It’s truly a turning point for Bitcoin, and quite possibly for the greater crypto industry. 

As many suspected, big money investors might feel more comfortable holding their Bitcoin in a Bitcoin ETF with all the regulatory assurances that come with it. It’s hard to imagine this trend stopping. The genie has been let out of the bottle. 

And now, with the Bitcoin ETF eating up headlines and causing global FOMO, the SEC must begin to consider whether it will approve or deny an Ether ETF. Undoubtedly, these are transformative times for the crypto sector.

Bitcoin ETF A Resounding Hit 

This last week alone saw record inflows to crypto exchange-traded products (ETPs). Combined assets under management (AUM) reached levels last seen during the 2021 bull market top, according to capital market company Coinshares. With crypto investment products AUM now at $67 billion on the heels of year-to-date inflows of $5.2 billion.That is a massive number for an industry that had been so shunned by its traditional counterparts until now.     

Crypto ETPs saw $2.45 billion inflows in the week ending Feb. 16, largely coming from the  United States, including the 10 approved spot Bitcoin ETFs. BlackRock and Fidelity ETFs, which were responsible for almost $2.3 billion of last week’s inflows at $1.6 billion and over $648 million, respectively. Bitwise, Grayscale, ProShares and 21Shares also saw massive inflows. 

As a backdrop to this action in the traditional financial markets, the raw Bitcoin price increased  by more than 4% from Monday, Feb.12 to Friday, Feb.16, closing the week at more than $52,000, which is a level that has not been seen since 2021. Bitcoin then faced resistance at $53,000. 

Bitcoin USD daily chart 

Sentiment has certainly improved, and people were expecting a major pop on the ETF news. The pop never came to pass. Instead Bitcoin dipped, before quickly rebounding. It might be a mistake to assume this is the start of the next bull run. That might play out in a longer manner than is expected by many Bitcoin industry pundits. 

This wild ride began in August when an appeals court favored Grayscale and called the SEC’s denial of spot Bitcoin ETFs “arbitrary and capricious,” leading to a reconsideration of the petition. The SEC went on to approve the launch of  11 bitcoin spot ETFs, forever changing the crypto industry. Now it is a mainstream industry, whereas before it really had an underground appeal that has been stamped out in the US and many other places around the world. 

With the Bitcoin ETFs now live, we are seeing in real time how investor appetite is moving on from bitcoin futures and looking into the spot Bitcoin ETFs. One benefit of that is the spot Bitcoin ETF should more closely follow the Bitcoin price than the futures. What’s more, the spot Bitcoin ETFs are issued by some of the largest and most secure institutions on the planet. Individuals and entities are clearly more comfortable with products like the Bitcoin ETF than holding raw Bitcoin. 

Bitcoin ETFs will see continued success as investors prefer exposure to Bitcoin than not, especially in a familiar setting such as ETF markets with an asset secured by the world’s largest custodians, such as JPMorgan. Nothing can stop Bitcoin ETFs at this point, and it’s very likely the same will be true for Ethereum ETF, once that offering is finally approved.

Ethereum ETF Likely To Be Approved Within One Year

Crypto is abuzz in 2024. And not only amongst cypherpunks. Instead, the biggest financial players in the world constantly have Bitcoin on the tips of their tongues. Discussion on the spot Bitcoin ETFs is taking place in all sectors of the financial industry. The United States is dominating ETP markets, basically accounting for 99% of overall inflows with  $2.4 billion. Ethereum is up next.  

It’s likely that the SEC will now be forced to approve the spot ethereum ETF. The argument that Ethereum futures contracts can exist while Ethereum spot ETFs cannot will likely again be found to be irrational by a court. The SEC must rule on the Ethereum ETF by May, when it will decide upon an application submitted by tech investor Cathie Wood’s company Ark Invest, and in partnership with 21Shares. That will be a turning point for the Ethereum market akin to the one Bitcoin just experienced. 

In the meantime the Bitcoin ETF is inundated with attention from the financial world, especially financial advisers, who have not yet waded into the market as they must first adhere to a required waiting period for due diligence purposes. Nonetheless, institutional FOMO is here. The changing sentiment in Wall Street is not hard to see. BlackRock CEO Larry Fink once called Bitcoin an “index of money laundering” and now he calls it a “store of value.” When Fink speaks, people listen, as BlackRock is the world’s biggest money manager, holding approximately $10 trillion in assets under management.

Bitcoin and Ether ETFs are likely to take center stage in the world of crypto ETFs. In fact, the SEC might not even approve any crypto spot ETFs beyond the industry’s top two coins–Bitcoin and Ethereum. Solana, which might be another candidate, has lost favor due to recent bouts of network downtime. 

If not approved in May, it seems extremely likely that an Ether ETF is approved in the next year. Big money–many of the same players in the Bitcoin ETF– want to issue the ETFs in the US. Franklin Templeton, Blackrock (BRK) and Fidelity and others have already submitted applications for an ether ETF. 

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The arguments are clear for why the SEC should approve an ether ETF. Ethereum has institutional use cases and can be used to create new, more transparent financial markets. Big firms have been experimenting with Ethereum smart contracts for years now–dating back to at least 2015 when corporate America first started touting the virtues of blockchain. Due to its familiarity and proven track record, Ethereum could be well positioned to be adopted at the institutional level. 

The approval of the Bitcoin ETF has only made all of this more likely.