US investment management firm VanEck believes ethereum exchange-traded funds (ETFs) could become larger than similar bitcoin products after the US Securities and Exchange Commission (SEC) finally approves them in the coming months.
In a recent interview, Pranav Kanade, portfolio manager at VanEck, one of the issuers of the bitcoin spot ETFs launched in January, bitcoin-etfs-says-vaneck/” data-wpel-link=”external” target=”_blank”>saying ethereum ETFs could attract more demand as they have a market size as large, if not larger, than bitcoin ETFs.
ethereum ETFs Could Outperform bitcoin ETFs
Kanade's belief contrasts with some members of the crypto community, who think that ethereum ETFs won't make much sense since the products may not allow staking of the reward distribution. She recalls that ethereum moved to a proof-of-stake protocol in 2022. Ether (eth) holders can earn various returns by staking their assets on the blockchain.
Market analysts believe that cryptocurrency investors should buy and stake their own eth instead of investing in ETFs. However, Kanade insists otherwise.
“The world of investors looking for cash-producing assets is huge and eth obviously generates fees that go to token holders. Even if you don't have an ETF that can offer staking as part of it, it's still a cash-producing asset, so I think eth might make more sense as an asset for more people than bitcoin,” he stated.
While the VanEck portfolio manager believes ethereum ETFs could outperform bitcoin funds, he calls such a feat a massive undertaking, considering the $11 billion-plus inflows that bitcoin spot ETFs have seen. within two months of its launch.
SEC ethereum ETF Approval Odds Are 50%
In addition to Kanade's controversial belief that ethereum ETFs will outperform bitcoin funds, he put the odds of the former being approved by the SEC at 50%, contrary to Bloomberg analysts' 30% prediction.
Considering that the SEC was legally forced to approve bitcoin spot ETFs, courtesy of the Grayscale court ruling, it seems unlikely that the agency will be eager to greenlight similar products for ethereum.
However, the agency's commissioner, Hester Pierce, popularly known as crypto Mom, believes that the regulator would not need a lawsuit or court order to approve pending ethereum ETF applications.
Meanwhile, VanEck recently reduced the management fee for its bitcoin ETF, HODL, from 0.2% to 0% to attract more investors to the product. The current fee will remain in place until March 2025 or until HODL accumulates $1.5 billion in assets under management.
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