Delays in Ether ETFs are possible as institutions are not yet prepared

Crypto News– The approval timeline for spot Ether exchange-traded funds (ETFs) might face delays extending beyond the final deadline in May, as major financial institutions are yet to formulate internal strategies for positioning themselves for approval, according to Robby Greenfield, CEO of the smart money protocol Umoja, in conversation with Cointelegraph.

Delays in Ether ETFs are possible as institutions are not yet prepared

“The challenge for institutions in positioning themselves favorably with Bitcoin, Ether, and cryptocurrencies, in general, lies in their inability to conduct the same market-manipulating practices as with traditional commodities. Unlike paper gold, you can’t generate paper Bitcoin,” Greenfield remarked.

Key contenders for an Ether ETF ticker include BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton.

Bloomberg ETF analyst James Seyffart anticipates the Ether ETF approvals currently under review to be declined towards late May, as per a March 19 post. The U.S. Securities and Exchange Commission (SEC) deferred its decision on the Hashdex and ARK 21Shares spot Ether ETFs on March 19, with a final decision deadline set for late May.

My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round. The SEC hasn't engaged with issuers on Ethereum specifics. Exact opposite of #Bitcoin ETFs this fall. https://t.co/TyAzAOrAC5

— James Seyffart (@JSeyff) March 19, 2024

Due to the decentralized nature of cryptocurrencies like Ether, devising institutional strategies for ETFs presents more complexities. Although delays seem probable, Greenfield believes that Ether ETF approvals are inevitable, regardless of the timing:

“Whether it’s approved in May or December, it’s inevitable… I fail to see why it wouldn’t be approved, especially considering that the SEC’s stance on Ether increasingly leans towards categorizing it as a commodity rather than a security.”

The SEC must make decisions on VanEck’s application by May 23, ARK 21Shares’ by May 24, Hashdex’s by May 30, Grayscale’s by June 18, and Invesco’s by July 5. Fidelity and BlackRock’s applications are due for decisions by August 3 and August 7, respectively.

Beyond spot Ether ETFs, major institutional players remain cautious about investing in decentralized finance (DeFi) due to infrastructural limitations, hindering traditional retail investor involvement as well, Greenfield explained:

“Institutional capital won’t engage with DeFi unless there are established processes and assurances in place to ensure their comfort. Similarly, true retail investors won’t enter DeFi until there’s a smoother user experience, necessitating simpler infrastructure.”

Greenfield emphasized the importance of providing retail investors with access to sophisticated investment strategies, considering that individual investors have historically had limited access to wealth management tools compared to institutions.