.png)
Some U.S. lawmakers are obviously displeased with the performance of spot Bitcoin ETFs within just two months of their inception. Senators Reed and Butler wrote the U.S. Securities and Exchange Commission (SEC) on Thursday, March 14, pleading with them not to approve any further Exchange-Traded Products (ETPs) for tokens other than Bitcoin. Legislators have indirectly been pressuring the SEC to reject the Ethereum ETF that was just proposed.
Read Also: Miners of Bitcoin (BTC) Connected to $35.9B OTC Trade Following ETF Approval
Compared to Most S&P 500 Stocks, ETH Is More Liquid
Coinbase's Chief Legal Officer, Paul Grewal, politely addresses senators by presenting data that refutes their claims. He notes that SEC staff has been informed of their findings and extends an invitation to speak with them or any other legislators who would like more information.
Grewal highlights that a multitude of digital asset commodities, including but not limited to Bitcoin, provide indicators of market quality that outperform even the most heavily traded stocks. The spot market for Ethereum (ETH), for example, is deep and liquid, with just two S&P 500 equities having larger notional dollar trading volumes. Furthermore, the adjusted bid-ask spreads of just one S&P 500 company are less than those of ETH.
Grewal notes that ETH's futures and spot markets have a similar strong and steady correlation to Bitcoin, making it easier to monitor the market. This emphasizes how stable and dependable Ethereum's market architecture is.
Prominent Ethereum contributor Anthony Sassano contends that people should be against this development regardless of their emotions for Ethereum (ETH) or their desire for an ETF. He draws attention to the fact that many legislators see cryptocurrencies as one and the same, which could result in the adoption of negative laws that would have an impact on the whole market. Regardless of one's own inclinations, Sassano highlights the significance of speaking out against such acts in order to avert negative consequences for all cryptocurrencies.
Ethereum ETF Spot Could Beat Bitcoin ETFs
As was recently reported, the pressure from the politicians has caused the optimism surrounding the spot Ethereum ETFs to decline. On Thursday, March 14, VanEck released a research suggesting that spot Ether ETFs would surpass Bitcoin ETFs in size. Pranav Kanade, Portfolio Manager at VanEck, stated:
“From a market perspective, part of me believes that the market size for a spot ETH ETF is potentially as big if not bigger than the spot bitcoin ETFs. 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.”
ETH holders can stake on the blockchain and earn income thanks to Ethereum's Proof of Stake. For ETH holders, Coinbase provides a yield of about 3%. It is unclear, meanwhile, whether the SEC will approve spot ETH products. Analysts at Bloomberg now predict a 30% likelihood, but Kanade believes it's more like 50%.