Bitwise’s Matt Hougan Hopes SEC Will Hold Off on Spot Ethereum ETFs Until December

Bitwise Ethereum Ethereum ETF

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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April 1, 2024 00:45 EDT

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Bitwise investment chief Matt Hougan expects the investment firm to become an Ethereum ETF kingpin, but strategically desires a December approval for the products instead of a hasty splash in May.

In a move aimed at replicating the success of recent Spot Bitcoin ETFs, the firm recently filed an SEC application to launch a Spot Ether ETF. This filing positions Bitwise as a potential competitor in the race to bring this product to market.

The proposed “Bitwise Ethereum Trust” would directly own Ethereum and might also leverage staking services offered by reputable custodians to generate further returns.

“I think the market’s consensus that it will happen in May is possible, but unlikely,” Hougan told Forbes in a recently published interview. “I feel very confident we’ll get an Ether ETF.”

Ethereum Struggles for Investor Attention Despite Dencun Upgrade

However, the CIO acknowledged the challenge of piquing financial advisors’ interest in Ethereum currently. He highlighted Ethereum’s recent Dencun upgrade, noting its absence from recent industry-wide discussions.

“It’s just hard to get people to focus past bitcoin at this point from professional investors,” he said.

US spot Bitcoin ETFs attracted a renewed influx of capital last week, indicating a reversal of fortune after a period of sustained net outflows.

Ten approved spot Bitcoin ETFs collectively generated $418m on March 26, with BlackRock and Fidelity’s offerings leading the surge.

Hougan Advocates Gradual Introduction of Ethereum ETFs

Hougan expects a sequential adoption pattern within the crypto investor base, with Bitcoin serving as the initial entry point followed by a desire for diversification.

Notably, Bitwise’s Ryan Rasmussen in February projected a 50% chance of approval for a Spot Ether ETF by May, a sentiment widely shared by the market.

Despite the anticipated May approval, Hougan believes that a December launch would be strategically more advantageous.

“I know that sounds goofy, but I think TradFi is still digesting Bitcoin. And if you give TradFi time to get comfortable with Bitcoin and crypto, they will be ready for the next thing,” he told Forbes. “But if you shove it down their throat in May, I’m not sure they will be.”