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As anticipation surrounding spot Ethereum exchange-traded funds (ETFs) grows, market observers continue to focus on the potential impact these investment vehicles may have on ETH. Experts are expecting that with the approval and launch of spot ETFs in the US, Ethereum (ETH) could enter a sustainable growth trend similar to Bitcoin (BTC) and gold.
Ethereum Poised for Sustainable Growth
The approval of 11 spot <a href="https://en.coin-turk.com/arthur-hayes-warns-crypto-world-traditional-finance-could-kill-bitcoin/”>Bitcoin ETFs earlier this year has given Ethereum investors hope. However, some experts believe that the launch of spot Ethereum ETFs will lead to sustainable growth rather than the mesmerizing price surges often speculated.
Thanks to the positive outlook fueled by rumors of Spot Ethereum ETF approvals, Ethereum’s native asset ETH has surpassed the $3,000 mark for the first time since April 2022, achieving a 15% increase over the past week. This rise has outpaced Bitcoin’s 8% increase during the same period, indicating a growing interest in Ethereum following the approval of spot Bitcoin ETFs.
Despite expectations that at least one spot Ethereum ETF will be approved in the US by the end of this year, some market observers believe that these investment vehicles are unlikely to create a bubble in the ETH market. According to Bitfinex’s derivatives director Jag Kooners, institutional investments through ETFs could stabilize the Ethereum market and bring about continuous growth similar to that observed in spot Bitcoin and gold ETFs.
On the other hand, Kooners highlights the role of Ethereum’s Layer-2 solutions in increasing scalability by enabling faster and cheaper transactions outside the main Blockchain. He emphasized that these solutions prioritize rapid expansion, potentially attract institutional investments, and broaden Ethereum’s application scope.
The “Classification” Barrier Ahead of Spot Ethereum ETF
Despite ongoing regulatory debates, the classification of ETH as a security or commodity remains a significant barrier to the approval of a spot Ethereum ETF. This indicates the presence of serious obstacles to the approval of spot ETFs. Some traditional finance firms, pointing to the regulatory uncertainty surrounding these investment products, estimate a 50% chance of a spot Ethereum ETF being approved by the end of May.
Notably, many leading financial institutions, including Franklin Templeton, BlackRock, Fidelity, Ark, and others, have submitted spot ETF applications to the SEC, driven by the growing interest of institutional investors in directly investing in Ethereum’s ETH, and are currently awaiting approval from US regulators.
