Ethereum ETF’s decision is reminiscent of Bitcoin’s spot launch

Cryptocurrency

Remember the spot launch of the bitcoin ETF?

As the drama of the spot ETF approval on Ethereum unfolds, investors and exchange-traded fund industry observers may recall the parallels between this case and the events leading up to the eventual approval and filing of spot ETFs on bitcoin.

In both cases, the Securities and Exchange Commission (SEC) initially showed caution towards approving spot ETFs for these cryptocurrencies. However, pressure from various stakeholders, including issuers, investors, and the maturing cryptocurrency market, has spurred a potential shift towards approval.

Both decisions reflect the growing recognition of the maturing cryptocurrency market and the rapid increase in institutional interest in these assets.

The presence of spots Bitcoin ETFsif the potential approval of an ether-based ETF suggests that the SEC is taking into account the growing demand from investors for regulated ways to gain exposure to these cryptocurrencies.

A key difference between the two cases is that the Ethereum ETF approval process may be faster than that of bitcoin due to the legal precedent set by the August 2023 Grayscale Court Casewhich effectively reversed the SEC’s initial rejection of the asset manager’s request for spot bitcoin ETFs.

Both cases highlight the complex path to approval and greater receptivity to well-structured spot cryptocurrency ETFs.

The next Dogecoin ETF?

In the first two days of trading this week, the popular cryptocurrency Dogecoin (DOGE) jumped 9% as investors began speculating that the largest meme coin by market capitalization could be the next to be approved by a Spot ETFs.

Cryptocurrency trader Andrew Kang tweeted to his 244,000 followers on X Tuesday, “the odds for a DOGE ETF look brighter than ever.”

While speculation on multiple spot ETFs isn’t surprising, it would be if next in line was a DOGE spot ETF.

Cryptocurrencies with clear and demonstrably valuable use cases beyond speculation might be viewed more favorably. Additionally, a well-developed ecosystem with a robust infrastructure for secure storage and transactions could be an advantage. Widespread acceptance, measured by a higher market capitalization (total value of all coins in circulation) and higher trading volume (liquidity), could also be taken into consideration.

For example, there are five cryptocurrencies other than Bitcoin and Ether that have larger market capitalizations than Dogecoin, according to data from CoiMnarketCap.com.

Behind Bitcoin and Ethereum, these are the largest cryptocurrencies on the market:

• Tether USDt (USDT): This stablecoin, with a market capitalization of around $111 billion, is pegged to the US dollar and is a popular choice for investors seeking stability in the cryptocurrency market.

• BNB (BNB): The native coin of the Binance ecosystem, BNB, has a market capitalization of approximately $91 billion and is used for various purposes within the Binance exchange and its blockchain applications.

• Solana (SOL): Solana, known for its fast transaction processing speed, currently has a market capitalization of around $80 billion.

The story continues

Overall, the launch of the Bitcoin spot ETF and the increasingly likely Ethereum spot approvals are positive developments, but do not guarantee a wave of multi-crypto spot ETFs. The SEC will likely continue cautiously, prioritizing established cryptocurrencies with well-structured ETF proposals.

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