Currently, experts are arguing about the likelihood of the US Securities and Exchange Commission (SEC) approving an ethereum spot ETF. Among others, Samson Mow, known as the “bitcoin Maximalist” and founder of Jan3, a company focused on accelerating the adoption of btc by nation states, expressed strong doubts and criticism.
Mow Review: Analyzing the ethereum ETF Dilemma
Samson Mow's analysis The description of the ethereum ETF situation is full of knowledge and skepticism, offering a detailed critique that addresses regulatory inconsistencies, the unique characteristics of eth, and the speculative nature of its market dynamics. Mow's statement on X (formerly Twitter) serves as a critical assessment of what the approval (or denial) of an eth ETF could mean for the broader crypto landscape.
“The ethereum ETF is not a news selling event, it is a shitcoin selling event. That is, sell at any time. I would say the odds of approval are 50/50, but both approval and rejection are very bearish for ethereum,” Mow stated, setting the tone for his argument against the ethereum ETF. His comments underscore a deep-seated skepticism toward eth's valuation and its position within the SEC's regulatory framework.
Mow delves deeper into the regulatory conundrum facing the SEC, stating: “The SEC jumped the gun on approving eth futures (along with btc futures), which means they rationally need to approve the eth spot ETF for the same reasons.” reasons than that of btc. “This observation highlights the precedent set by the SEC's previous actions, which Mow believes complicate the decision-making process regarding the ethereum ETF.
Addressing the complexities introduced by ethereum's design, particularly its staking mechanism and pre-mining, Mow articulates a series of rhetorical questions: “What kind of product generates a return? What kind of commodity ETF prints 70% of its supply out of thin air? “What kind of commodity ETF modifies its own ‘monetary’ policy at will (ultrasonic money)?” These questions not only challenge conventional commodity definitions, but also point out the difficulties in categorizing ethereum within existing investment and regulatory frameworks.
Mow's criticism extends to the speculative nature of eth price movements based on the bitcoin ETF success story, attributing recent gains to “hope for approval” rather than genuine capital inflows. Even in the case of an approval, Mow predicts a drop in the price of eth. Because? Because analogous to the timely launch of the bitcoin ETF, there is the Grayscale ethereum Trust (ETHE), which holds 2.9 million eth. These would then be redeemable, 2.4% of the current supply.
Therefore, he predicts a no-win situation for Ether, explaining that “if an ethereum spot ETF is not approved, speculators will sell. If a spot eth ETF is approved, existing holders will sell and no one will buy because it is structurally flawed.”
Chances of approval have decreased
As Bitcoinist reported, Bloomberg ETF expert Eric Balchunas recently dramatically changed his odds of spot approval of an ethereum ETF in the US. “Yes, our odds of eth ETF approval before the deadline in May have been reduced to 35%,” Balchunas shared, reflecting a cautious stance due to the SEC's historical positions and the agency's current signals.
At the time of this publication, eth was trading at $4,003.
Featured image created with DALL·E, chart from TradingView.com
