ETH futures reflect pessimism with crypto regulation and potential delay in the spot ETF launch.
On May 23, the U.S. Securities and Exchange Commission (SEC) greenlit spot Ethereum exchange-traded funds (ETFs), but the actual trading of these instruments in U.S. markets will take longer as the regulator has yet to approve each of the eight funds' individual S-1 filings. Given the uncertainty, Ether’s (ETH) price has struggled to surpass the $3,900 resistance, and the answer may lie in Ether’s futures markets.
Part of the discomfort among Ether investors, even those assuming that the effective spot ETF launch in the U.S. is imminent, stems from the Grayscale Ethereum Trust (ETHE) conversion into a spot instrument. If the fund administrator decides to maintain its $11 billion fund fees at levels much higher than its incumbents, the likely result will mirror Grayscale’s GBTC outflows, thus offsetting inflows from competitors including BlackRock, Fidelity, VanEck, and ARK 21Shares.
Some analysts have claimed that the SEC’s decision to approve the spot Ethereum was heavily influenced by last-minute political pressure from Democrats to win over swing voters in the U.S. Presidential election this November. However, analysts note that the SEC knew the Ethereum instrument shared the same regulatory setup as the spot Bitcoin ETFs, so according to Bernstein’s analysts, the “SEC took a more pragmatic approach and avoided a legal battle.”
