By
Temitope Olatunji
April 26th, 2024
VanEck stated that Ethereum is a cash producing asset and thus its spot ETF could be more or equally successful to the Bitcoin ETFs.
Amid the looming decision over the approval of a spot Ether ETF by the US Securities and Exchange Commission (SEC), industry experts are assessing the potential adoption of such a fund. Global investment firm VanEck recently stated that spot Ethereum ETF could see massive demand if approved.
VanEck Portfolio Manager Pranav Kanade expressed his belief that the potential size of a spot Ether ETF could be as significant, or even larger, than that of spot Bitcoin ETFs. He added:
“The world of investors who are looking for cash producing assets is massive and ETH obviously generates fees that goes to the token holders. Even if you don’t have an ETF that can offer staking as a part of it, it’s still a cash producing asset, so I think ETH could make more sense as an asset to more people than Bitcoin does.”
However, some argue that investing in an Ether ETF wouldn’t be advantageous as these funds might not facilitate staking reward distribution. They believe that investors would fare better by purchasing and staking their own Ether (ETH).
Given Ethereum’s utilization of a Proof of Stake consensus mechanism, ether holders can earn yields through staking. For instance, on platforms like Coinbase, ETH stakers can earn approximately a 3% yield.
Nonetheless, the likelihood of SEC approval for spot ETH products remains uncertain. Analysts at Bloomberg recently decreased the probability of regulatory approval, even without considering the staking aspect, to just 30%. In contrast, Kanade estimates the odds to be closer to 50%.
Ethereum to Outperform Bitcoin in 2024
Bitcoin is preparing for another significant event this year with its upcoming halving scheduled for April. Reflecting on past halving events, Matthew Sigel, VanEck’s Head of Digital Assets, offered an optimistic perspective on Ethereum earlier this month.
As per Sigel, Ethereum will outperform Bitcoin this year in 2024. Currently, Ethereum’s year-to-date gains stand at 55% while that of Bitcoin are around 51%. However, Sigel added that he doesn’t see Ethereum to “flip” Bitcoin as the largest cryptocurrency. He added:
“Over the medium term, ETH tends to outperform BTC in the halving year, right? So I don’t want to lose the forest for the trees. I don’t think there will be flippening, but I do think when the year is said and done, ETH will have outperformed BTC.”
On the other hand, lawmakers have been forcing the SEC to not consider launching any other crypto ETPs after the Bitcoin ETF launch.
Even if you hate ETH and don't want to see it get an ETF, you should be pushing back on this
"Crypto" is all in the same bucket for these boomers so they will treat it as such and try to advance really bad policy around all of crypto – not just the coins you personally hate https://t.co/RW86D1YmE2
— sassal.eth/acc 🦇🔊 (@sassal0x) March 15, 2024
This casts a shadow over the Ethereum ETF approval this year. However, Ethereum developers have requested the broader crypto community to show unity and oppose the lawmakers’ move.
