Market watchers anticipate that spot Ethereum ETFs will be approved in a similar manner to the phenomenal demand for Bitcoin ETFs during the first two months of their introduction. Leading firms in the sector, including as Fidelity and BlackRock, have been exerting pressure to secure an Ether ETF spot in the market, but there appears to be less optimism overall.
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What Are the Obstacles to the Approval of the Ethereum ETF?
Blofin Analysis has shown that there is a significant chance that spot ETH ETFs won't be approved because of things like the drawbacks of the proof-of-work system, dangers of market manipulation, and worries about securitization.
According to BIoFin's data, retail traders control less than 45% of the ETH supply, with 1,041 addresses holding over 10,000 ETH each, accounting for approximately 55% of the total (about 66 million coins). Because of their interest in voting rights under PoS, these big holders have significant impact over ETH network enhancements. In its public filings, the SEC has also voiced concerns over the same, stating:
“…Are there particular features related to ether and its ecosystem, including its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities, that raise unique concerns about ether’s susceptibility to fraud and manipulation?”
When compared to ETH, the distribution of BTC holders is more even, and they do not have voting rights. As of March 2024, there were approximately 2,100 whale addresses and approximately 40% of the BTC supply owned by whales, which limits the possibility of price manipulation.
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The Data for Ethereum Options Doesn't Support
There are possible leads in the options market. The far-month option skewness for both Bitcoin and Ethereum saw a significant increase after the release of the spot BTC ETFs application, peaking in November 2023. The release of the spot ETH ETF application, on the other hand, did not cause option traders to add to the optimism. According to BioFin, the increase in far-month skewness in February was probably caused more by the return of liquidity than by the ETF news.
Regardless of the outcome, the study emphasizes that the ultimate decision regarding the authorization of spot Ethereum exchange-traded funds (ETFs) will not impede the possible surge in the price of ETH.
In related news, Matt Kunke, a former GSR research analyst, has been hired by Blackrock to serve as their digital assets product strategist. This action demonstrates Blackrock's commitment to improving its customers' access to bitcoin ETFs.
The price of ETH has risen above $4,000 once more, marking a significant milestone as the community gets ready for the upcoming Dencun upgrade.