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How certain is SEC approval of an ether ETF?
The Securities and Exchange Commission (SEC) is rapidly approaching its Thursday deadline whether to approve an ether ETF. Cryptocurrency prices, including ethereum (ETH-USD), I was gathering this week on hopes of a new investment offer, in the wake of spot bitcoin (BTC-USD) Green light for ETFs in early 2024.
BitGo Go Network Head and CEO Matt Ballensweig joins the Asking for a Trend Host Josh Lipton to explain his certainty that the SEC will eventually approve an ether ETF and what the demand might be for such a product.
“I believe there is an intentional shift by the current administration to signal real support for digital currencies. Last week we saw the Senate overturn SAB 121, which would have made it really difficult for banks and large players to hold cryptocurrencies. in their balance sheet,” explains Ballensweig. “Obviously, the decision still has to go through the president, but yesterday there was also overwhelming approval by the House of Representatives for the Cryptocurrency Financial Technology and Innovation Act for the 21st Century Act [FIT21] which had both Democratic and Republican support.”
For more expert insights and the latest market action, click Here to watch the full episode of Asking for a Trend.
This post was written by Luke Carberry Mogan.
Video transcription
Spot Ethereum, ETF S. Matt.
What do you think?
Will they get the green light?
Thank you so much for having me.
Uh, it’s great to be here.
I really think they’ll get the green light here.
I mean, I’ll say, you know, I’m looking at Crypto Twitter as we speak and I’m hearing rumors that this could happen.
Uh you know, just after 5pm
I’ve heard other reports that it might take a few more hours, but all, all signs point to this getting approved today.
Can I tell you, Matt, if it will be approved?
I was very wrong because I really thought I was interested in knowing your opinion.
I really thought that Se C president Gary Gensler.
I mean, he, he didn’t want that spot Bitcoin ETF.
He had to be dragged there.
Matt, it took a cause.
I honestly thought there would be another cause.
If you had been given the green light for a place in the ETF, perhaps you would have seen things differently.
Matt, look, I will say this, from a trader’s perspective and, and from the institutional side of cryptocurrencies, I think we were all very, very shocked to see how quickly things developed this week.
Um, you know, especially knowing the pace at which the Bitcoin ETF has developed, you know.
So hearing the news earlier this week that the SEC was asking some of these ETF issuers to amend their 194 documentation in preparation for spot ETF approval was very, very surprising and not at all obvious from the market.
The story continues
I mean, in theory the value was trading around 3000 flat and now it has shot up to 3700.
Um, you know, and it’s not just the ETF approval, but you know, there seems to be, I think there’s an intentional pivot on the part of the current administration to really signal support for digital currencies.
Last week we saw the Senate overturn SAAB 121, which would have made it really difficult for banks and large traders to keep the cryptocurrency on their balance sheet, which obviously still has to go through the president.
Um, but yesterday there was also overwhelming approval in the House of Representatives for the Financial Innovation and Cryptocurrency Technology for the 21st Century bill, which had both Democratic and Republican support.
So, you know Baton is now in the Senate, but whatever the catalysts may be.
Um, you know, it’s becoming clear that I think Congress wants to be on the right side of history here.
Uh and let’s make sure that the United States is really at the forefront of this, of this movement with, you know, innovations in finance and technology globally as we always have been.
So I think this is clearly important to voters.
Uh We also have elections coming up.
So, you know, whatever these catalysts are, I think everyone in the institutional cryptocurrency world is very surprised at how this has progressed.
Um but, but very happy and Matt, let’s say you see the commercial, if your ETF S gets the green light, it gets approved.
What do you think Matt brings out the crystal ball?
What do you think the question is?
And where do you think the demand is coming from?
Yes, that’s a good question.
I mean, I think you could use, you know, the Bitcoin ETF as a proxy and kind of a guide to figure this out at some point.
And if you just look at the Bitcoin ETF flows in the first few months of trading here, you know, it’s been a funnel of capital into the ecosystem.
Uh We’ve seen, I think we’ve seen 1.1 billion net flows just in the last five days.
Uh and about 13.5 billion of net new demand holistically for the asset.
So there’s obviously a huge institutional pool, I think, you know, a demand pool out there and you know, Ethereum is going to be something similar to that, you know, maybe it’s going to be a fraction of that.
Um, but obviously, I think there are a lot of interested parties that now have the foundation needed to add Ethereum as part of their portfolio.
Um, but more importantly than just being, you know, the actual funnel of capital into the asset.
I think it’s really the beginning of a whole new class of investors forming on the ecosystem.
Uh, you have people, you know, you’ve had people like Larry Fink, right, explaining the value of Bitcoin as a decentralized, fair, non-sovereign, inflation-resistant Internet-based currency and what that means.
And now, you know, investors will have to go a little deeper down the rabbit hole to understand.
Well, what about the Ethereum ecosystem?
Do you know, what are smart contracts for programmability?
How did decentralized exchanges work?
You know, what are the other alternative levels out there?
And how do you balance things like consensus with speed?
So all these questions that we in the institutional world of cryptocurrencies have been exploring for some time will now become mainstream.
And I think it’s going to be a huge benefit not just to e, but to many other layer one protocols in the space.
Um, you know, over time and I think we’ll see a lot of capital come into the crypto ecosystem as a result of this Ethereum ETF spot approval and Matt, I’ll get you out of here for this.
Let’s say we do this, we see an Ethereum spot ETF is approved, gets the green light.
How does this impact and influence the price of Ethereum Matt?
What is your hypothesis?
I mean, 12 months out.
Give me a goal.
Yes, all 1212 months out.
Um, I think, I think I will, it will definitely challenge if it doesn’t hit all-time highs.
Uh, so it wouldn’t surprise me, it wouldn’t surprise me to see a 5000 level, uh, 12 months from now.
Um, so I’ll keep doing that.
Opaque.
Thank you so much for joining the show today.
That was great.
I appreciate your time.
My pleasure.
Thank you so much for having me.