The approval process for spot Ethereum ETFs is facing potential delays beyond the final deadline in May. This delay is attributed to the challenges large financial institutions face in developing internal strategies to position themselves for approval, according to Robby Greenfield, the CEO of smart money protocol Umoja.
Ethereum ETFs face a potential delay
Greenfield highlighted the difficulty institutions encounter in leveraging market-manipulating functions with cryptocurrencies like Bitcoin and Ether, unlike previous commodities. The inability to create “paper Bitcoin” similar to traditional commodities like gold complicates their approach.
Several prominent companies are vying for Ethereum ETFs, including BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton. Bloomberg ETF analyst James Seyffart anticipates that the current Ether ETF approvals might face declination by late May, as mentioned in a March 19 report. The United States Securities and Exchange Commission (SEC) recently postponed its decision on Hashdex and ARK 21Shares’ spot Ether ETFs. Both applications await a final decision by late May.
The decentralized nature of cryptocurrencies like Ether poses challenges in creating institutional strategies for ETFs, contributing to the potential delay in approvals. Despite this, Greenfield believes that Ether ETF approvals are inevitable, whether in May or later in the year. He emphasized the SEC’s evolving perspective on Ether as a commodity rather than a security, which could pave the way for approvals.
Optimism and growth in retail access
The SEC has impending decisions on various Ethereum ETF applications, including VanEck’s by May 23, ARK 21Shares’ by May 24, Hashdex’s by May 30, Grayscale’s by June 18, Invesco’s by July 5, Fidelity’s by August 3, and BlackRock’s by August 7. Beyond spot Ether ETFs, large institutional players remain cautious about investing in decentralized finance (DeFi) due to infrastructure limitations.
Greenfield noted that institutional capital hesitates to enter DeFi without established processes and guarantees, while retail investors seek a more user-friendly experience. Greenfield emphasized the importance of enabling retail access to smart investment strategies, given that retail investors account for 52% of global assets under management. To facilitate this access, Umoja recently closed a $2 million extension to its initial seed funding round, bringing the total funding to $4 million.
This move aligns with projections by the World Economic Forum, estimating that retail investors will contribute to 61% of global assets under management by 2030. The approval of spot Ether ETFs faces potential delays, but industry experts like Greenfield remain optimistic about eventual approvals, driven by the evolving regulatory perspective and the growing demand for retail access to investment opportunities in the cryptocurrency market.
