Ethereum
Where investors place their bets
Spot Bitcoin exchange-traded funds (ETFs) have been a catalyst for Bitcoin. They made billions of dollars and helped propel Bitcoin to new heights before its next halving. These ETFs were the first of their kind, allowing equity investors to gain direct exposure to cryptocurrencies. Their approval has sparked significant discussions around spot ETFs of some of the other major tokens, with Ethereum ETFs at the forefront.
The second largest token by market capitalization, Ethereum is focused on providing a platform and access to decentralized finance (DeFi). Blockchain is home to some of the best crypto projects, ranging from AI tokens to meme coins and everything in between.
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Discussions about an Ethereum ETF have intensified. Although applications were submitted throughout 2023, Bitcoin ETFs overshadowed them in discussions with the United States Securities and Exchange Commission (SEC). With the release of Bitcoin ETFs, regulators and potential sponsors are accelerating discussions about ETH ETFs.
Most analysts believe that Ethereum ETFs will be approved because Bitcoin ETFs set a precedent and investor demand exists. Ethereum ETFs are more a question of when rather than if.
Additionally, Ethereum has some unique features that could make it a great choice for investors. Specifically, Ethereum’s consensus mechanism allows users to stake tokens in exchange for fees. In practice, this works in the same way as stock lending, which can allow you to earn extra money on the assets you hold.
“The world of investors looking for liquidity-generating assets is huge and ETH obviously generates fees that accrue to token holders,” said VanEck portfolio manager Pranav Kanade.
VanEck is one of the companies that launched a Bitcoin ETF in January and applied for an Ethereum ETF. Kanade added that “from a market perspective, part of me thinks that the market size of a spot ETH ETF is potentially as big, if not bigger, than spot Bitcoin ETFs,” showing that it is confident in ETH’s ability to attract investors. Spot Bitcoin ETFs have been the most successful ETFs in history, attracting more investments than any other ETF in its first few months of launch.
Markets seem to agree with Kanade. Ethereum is up over 100% in the last six months. Additionally, tokens focused on staking, which is one of the main attractive aspects of ETH, have seen solid price increases recently: Avalanche (AVAX) is up almost 500% in the last six months , And Clean diaper has attracted more than $11 billion in investment.
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Investors have shown interest in staking outside of Ethereum and in Ethereum in general. Spot Ethereum ETFs would combine the two, potentially creating an ETF sector larger than Bitcoin.
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This item Asset manager says Ethereum ETFs could be even bigger than Bitcoin ETFs: where investors are placing their bets originally appeared on Benzinga.com
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