Valkyrie: Spot Ethereum ETF approval will take 1-2 years

Steven McClurg said that spot Ethereum funds will not be launched in May as some analysts believe

23.02.2024 - 09:17

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3 min

What’s new? Steven McClurg, CIO of asset manager Valkyrie, said that the launch of spot Ethereum exchange-traded funds (ETFs) will not be approved in May as some analysts believe. He predicted that it will take 1-2 years for the investment instruments to be approved. In an interview with The Block, McClurg explained that “There was a lot of work put into getting spot bitcoin launched on behalf of regulators and the SEC, as well as the issuers.” This is a new asset class, so regulators and companies have a lot to learn, he added.

Material by The Block

What else is known? There are many differences between bitcoin and Ethereum, McClurg said, so it will take the SEC a long time to understand what disclosure looks like for such a product. In addition, some of the applications for a spot Ethereum ETF have included a staking component, which McClurg said could add another layer of complexity.

Analysts at S&P Global Ratings said in a report that staking could increase the risk of Ethereum consolidation. Ark Invest and Franklin Templeton said they intend to generate additional returns by placing the underlying ETH.

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In January, the SEC postponed the deadlines for applications by investment firms Fidelity and BlackRock for spot ETH ETFs to March 5 and March 10, respectively. Bloomberg analyst James Seyffart admitted that the key date could be May 23.

In February, analyst Alex Krüger said that the Ethereum network will start to grow as soon as the probability of approval of ETFs based on the altcoin increases. He noted that Bloomberg experts “have been driving the ETF narrative for Bitcoin very successfully” and “they’re pinning the probability of an ETF by May [at] 60%.” However, he believes that such a possibility is “overly optimistic.”

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