Ethereum ETF Approval: BitMEX Founder Arthur Hayes and Grayscale CLO Are Positive.

The spot Ethereum (ETH) exchange-traded funds (ETFs) has become the topic of much speculation and debate. The co-founder of BitMEX, a popular crypto derivatives exchange, recently shared his thoughts on the potential impact of ETH ETFs on the market, specifically the success of spot Bitcoin (BTC) ETFs.

TLDR

BitMEX co-founder Arthur Hayes predicts that Ethereum will be in high demand, especially if the SEC approves spot ETH ETFs. Hayes believes that the success of Bitcoin ETFs will lead to licensing of ETFs for other crypto assets such as Ethereum and Solana, as banks will benefit from the fees generated by these products. Craig Salm, the chief legal officer of Grayscale, points out that the SEC's understanding of the lack of connection with the spot Ethereum ETF applicants does not preclude the possibility of such products. Salm argued that issues addressed in the Bitcoin ETF approval process, such as creation and redemption procedures, cash and cash transactions, and security risks, are applicable to Ethereum ETFs due to the similarities between the two cryptocurrencies. Despite growing uncertainty and regulatory uncertainty surrounding Ethereum ETFs, Salm believes investors deserve access to Ethereum in the form of a spot ETF, and the case for approval is just as strong for spot Bitcoin ETFs.

In an interview with The Wolf of All Streets, Hayes expressed his belief that Ethereum will experience a significant increase in demand, especially if the US Securities and Exchange Commission (SEC) approves applications for spot ETH ETFs.

It has outperformed even the likes of the Invesco QQQ ETF and the SPDR S&P 500 ETF Trust (SPY), the most successful ETF in history, with its recent approval and subsequent spot listing.

Hayes argues that the success of Bitcoin ETFs has set the stage for the adoption of ETFs for other crypto assets, such as Ethereum and Solana. He pointed out that the banks will benefit greatly from the payments generated by these products, and he pointed out that there is no possibility that they will oppose their consent. “The banks run everything in every major jurisdiction. And if the banks want to make money on these things, they will,” Hayes said.

Despite the optimism expressed by Hayes, skepticism has been growing in recent weeks regarding regulatory approval for Ethereum ETFs.

The SEC has postponed the approval process for many issuers, which has raised concerns among market analysts. Additionally, reports suggest the SEC is investigating Ethereum's regulatory classification as a security or commodity, adding further uncertainty to approved prospects.

However, Craig Salm, Chief Legal Officer of Grayscale, a leading digital asset management firm, believes that the SEC's failure to deal with spot Ethereum ETF applicants will not be a significant factor derailing the prospects of these products.

In a recent article on X Salm, he argued that the issues addressed in the Bitcoin ETF approval process, such as creation and redemption processes, cash and kind transactions, and custody issues, are directly applicable to Ethereum ETFs due to the similarities between the two. Cryptocurrencies.

1/There's been a lot of talk about spot #Ethereum ETFs lately. I personally do not give up on this and believe that ETFs should be approved. But now I want to talk about how I think the “lack of SEC involvement” should be viewed at this point.

— Craig Salm (@CraigSalm) March 25, 2024

Salm emphasized that the SEC has already been involved with issuers in the application process for spot Bitcoin ETFs, and that the solutions developed in this process can easily be applied to Ethereum. “All of these issues have been noted and are similar when comparing Bitcoin to an Ethereum ETF. The only difference is that the ETF holds Ether instead of holding Bitcoin. So in many ways, the SEC is already involved and issuers have less to do easily at this point,” Salm explained.

Salm reiterated the arguments made by Coinbase's Chief Legal Officer, Paul Grewal, regarding the SEC's approval of the ETH ETF. It highlighted the consistent and strong correlation between ETH futures and spot prices, strengthening the case for approval.

Despite the regulatory uncertainty and delays surrounding Ethereum ETFs, Salm remains convinced that investors want and deserve access to Ethereum in the form of a spot ETF.

He believes the approval case is just as strong for spot Bitcoin ETFs, and the SEC's involvement in the Bitcoin ETF approval process has paved a smooth path to approval for Ethereum ETFs.