Regulation
VanEck CEO hails Ethereum ETF approval as a pivotal moment in cryptocurrency regulation
The recent approval of Form 19b-4 filings for several Ethereum exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) has sent shockwaves through the cryptocurrency market, signaling a significant shift in sentiment, according to Jan van Eck, CEO of investment management firm VanEck.
VanEck is an investment management firm known for offering a diverse range of financial products and services. Founded in 1955, VanEck has earned a reputation for providing innovative investment solutions, including mutual funds, exchange-traded funds (ETFs), and other investment strategies aimed at helping investors achieve their financial goals. The firm focuses on various asset classes, such as equities, fixed income and alternative investments, and is particularly known for its expertise in sectors such as natural resources and emerging markets. VanEck’s approach combines in-depth market research with a commitment to meeting the evolving needs of investors, making it a respected name in the financial industry.
Like CNBC reported On June 1, in a recent interview with CNBC’s “ETF Edge,” van Eck described the SEC’s decision as “one of the most surprising things” he has witnessed in his career in terms of securities regulation. VanEck, which was the first firm to request permission to list an Ethereum spot ETF in the US, can now begin the process of bringing the product to market, although the exact timing remains unclear.
Van Eck believes the approval of Ethereum spot ETFs in the US goes beyond just Ethereum, suggesting it represents a broader narrative in the cryptocurrency market. He argues that there was a real risk of the SEC losing jurisdiction over digital assets and that the green light for Ethereum spot ETFs was a proactive move by the regulator to maintain its oversight.
VanEck CEO believes there is clearer regulation on the horizon and growing investor interest in cryptocurrencies. VanEck stated publicly on his website that “the evidence clearly shows that ETH is a decentralized commodity, not a security,” further strengthening the case for Ethereum ETFs.
In addition to SEC approval, van Eck pointed to the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the U.S. House of Representatives on May 8 as another significant step toward regulatory clarity for cryptocurrencies. While he expresses doubts about the bill making it to the US Senate before the upcoming elections, he believes the passage of FIT21 in the House demonstrates a growing recognition of the need for clear guidelines in the cryptocurrency industry.
The market reaction to the SEC’s decision was immediate, with Ether, the native cryptocurrency of the Ethereum blockchain, seeing a peak in value on May 23. However, the price has remained relatively flat since then, suggesting that the initial enthusiasm may have calmed down over time. investors await further developments.
Michael Nadeau, a renowned crypto analyst known for his work at The DeFi Report, recently provided a comprehensive analysis of the cryptocurrency market, focusing on Bitcoin (BTC) and Ethereum (ETH). Nadeau, renowned for his deep knowledge of decentralized finance (DeFi) and blockchain technology, highlighted Ethereum’s performance and valuation in particular.
According to ETF experts at Bloomberg, the flow of funds to ETH ETFs is expected to be around 10-20% of that to BTC ETFs. This expectation stems from several factors: less institutional interest in ETH compared to BTC, greater complexity in understanding ETH, lower trading volumes in ETH futures, and ETH’s market capitalization of approximately one-third that of BTC. Given that BTC ETFs have seen approximately $13 billion in net inflows since their launch, Nadeau estimates that ETH ETFs could attract $1.3-2.6 billion in net inflows.
Nadeau draws a parallel between the BTC price surge following the launch of US-listed Bitcoin spot ETFs and potential moves in ETH. BTC saw a 75% gain, from $40,000 to $70,000, after its spot ETFs began trading. Nadeau expects a similar performance for ETH, which could push it above its previous all-time high of $4,800.
Several factors could contribute to ETH’s outperformance. Unlike BTC miners, ETH validators do not face the same structural selling pressure, as a significant portion of ETH supply (38%) is “softlocked” on-chain, earning yield in staking contracts, DeFi applications or as a guarantee. Additionally, ETH balances on exchanges are at their lowest since 2016, indicating reduced selling pressure. Nadeau envisions ETH not just as a cryptocurrency but as a technology critical to Web3’s growth, offering a larger addressable market than BTC.
Nadeau extends his analysis to the broader cryptocurrency market, maintaining a highly bullish outlook. He identifies several favorable cycles, including innovation in blockchain technology, macroeconomic conditions, political developments, Bitcoin’s halving cycle, and ETF approvals. Regulatory concerns have receded, particularly as fears of aggressive actions by regulators like Gary Gensler have eased.
Using a hypothetical $10 trillion market cap for cryptocurrencies, Nadeau predicts BTC could reach $202,000 per coin and ETH could reach $14,984 per coin, assuming there is no change in supply. Even the most conservative estimates suggest significant price increases for both BTC and ETH, driven by continued advances and increased market accessibility.
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