Regulation
21Shares CEO Explains Why Ether Price Didn’t Rise With Launch of 9 US-Listed Spot ETFs — TradingView News
On July 23, 2024, 21Shares co-founder and CEO Hany Rashwan appeared on “Bloomberg Crypto” to speak with Sonali Basak and Tim Stenovec about Ethereum’s price action on the day nine U.S.-listed spot Ethereum ETFs went live, who these ETFs are aimed at, Ethereum’s use cases, and the potential for future integration of staking rewards into these ETFs.
Ethereum Price Trends and Market Conditions
Rashwan began by talking about the current price trend of Ethereum, which has been declining for three consecutive days.
CryptoGlobeSource: TradingView
Rashwan attributed this to the timing of the spot Ethereum ETF launches, noting that while the inflow of volume into the ETFs was significant, it had already been partially priced in. He compared this situation to the spot Bitcoin ETF launch, which occurred under more favorable conditions. Rashwan explained that global macroeconomic events and the summer period also had an impact on Ethereum’s performance. Despite these short-term fluctuations, Rashwan expressed optimism about the cryptocurrency market in general, and Ethereum in particular, over the next 6-12 months.
Target Audience for Spot Ethereum ETFs
When asked about the target audience for spot Ethereum ETFs, Rashwan highlighted the broad appeal of these financial products. He said that 21Shares, as the largest global issuer of crypto ETFs, caters to a mix of retail and institutional investors. Rashwan explained that retail investors often prefer ETFs due to the complexities of setting up their own portfolios and managing the associated infrastructure. Institutional investors, including family offices and independent asset managers, also find value in the regulated framework and custody solutions provided by ETFs. While pension and insurance funds have yet to fully embrace crypto investing, Rashwan expressed confidence that this will change over time.
Ethereum Use Cases
Rashwan elaborated on Ethereum’s unique use cases, distinguishing it from Bitcoin. He described Bitcoin as “digital gold,” which serves as a hedge against bad fiscal and monetary policies. In contrast, Ethereum is known for its practical applications, particularly in the realm of decentralized finance (DeFi). Rashwan noted that the Ethereum blockchain is the foundation for various financial applications, including smart contracts and stablecoins. He noted that stablecoins, primarily built on platforms like Ethereum, have had a significant impact, with Visa processing $10 trillion and stablecoins settling $9.3 trillion in transactions last year.
Future Staking Rewards Integration
One of the key topics discussed was the potential integration of staking rewards into Ethereum ETFs. Rashwan acknowledged that staking rewards were not yet included in these new ETFs, but assured that it was a matter of “when,” not “if.” He explained that the process of adding staking rewards involved educating regulators and ensuring they were familiar with the concept. Rashwan noted that 21Shares had successfully launched ETH spot ETPs without staking rewards in other regions and planned to update these products over time. He expressed confidence in convincing the U.S. Securities and Exchange Commission (SEC) to approve staking rewards, drawing parallels to the lengthy approval process for Ethereum spot ETFs.
Political Landscape and Regulation of Cryptocurrencies
The conversation also touched on the potential impact of the upcoming U.S. presidential election on cryptocurrency regulation. Rashwan said that the day-to-day operations of regulators will remain largely unchanged regardless of the outcome of the election. However, he stressed the importance of cryptocurrencies becoming a trending topic in political discourse, reflecting their growing importance among Americans. When asked about potential differences in cryptocurrency regulation under a Trump or Harris administration, Rashwan noted that bipartisan support for cryptocurrency legislation suggested positive outcomes regardless of the election results. He reiterated that cryptocurrencies made sense for America and were here to stay.
At the time of writing (21:30 UTC on July 23), ETH is trading at around $3,479, up 0.6% from the previous day.
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