Wall Street Loves Ethereum ETFs. But It Doesn’t Know How to Sell Them Yet

On the 121-year-old façade of the New York Stock Exchange, a freshly printed Ethereum ETF banner hung like a raised pirate flag. Tourists stopped, stared, and pointed. Younger people explained Ethereum to their families and guessed what the ETF was.

THE imaging was powerful and undeniable: Ethereum had conquered Wall Street. Or maybe it was the other way around?

On Friday afternoon, investment bankers, asset managers, and a few NFT heavyweights gathered at the New York Stock Exchange to celebrate the arrival of Ethereum spot ETFs in the United States by ringing the exchange’s closing bell. They were there at the invitation of Bitwise, one of the first nine ETH spot ETF issuers.

The mood was triumphant, and for good reason: during their first week of trading, ETH spot ETFs started with a ” very solid “ begin to bring in hundreds of millions of dollars, analysts say.

But among Manhattan’s banking elite, a slight unease set in. These people weren’t cryptocurrency novices; they had brought spot Bitcoin ETFs to the masses months before, with great success. But Ethereum was a different beast, and some were to have problems pin it. Ethereum was another cryptocurrency, sure, but it wasn’t THE cryptocurrency. It was some kind of software, wasn’t it? Maybe Could you present it as the future of the Internet?

The Bitwise team gathers for a photo in front of the NYSE building on Friday. Photo: Sander Lutz for Decrypt

It was a recurring theme on the New York Stock Exchange on Friday. The narrative around Bitcoin was relatively straightforward: It’s digital gold, as the narrative goes. But Ethereum? That’s much more difficult.

One way to explain it to TradFi clients, as I heard on Friday, is to compare ETH, the native cryptocurrency of the Ethereum network, to shares in iOS, Apple’s operating system for iPhone apps.

It’s an effective description, but one that’s not without its irony. Earlier this year, the U.S. Securities and Exchange Commission (SEC) seemed poised to condemn ETH is an unregistered security. So, sticking with the iOS stock analogy, this would have classified ETH as an illegal and unregistered stock in Ethereum, a network that powers thousands of decentralized applications.

But then the agency abruptly moved approve Ethereum ETFs spotted in May under guise political pressureeffectively declaring Ethereum a commodity. Wall Street was taken completely taken by surprise.

The Bitwise team rings the NYSE closing bell on Friday. Photo: Sander Lutz for Decrypt

Some of the bankers at the bell-ringing ceremony were there to familiarize themselves, in a way, with the still-murky world of cryptocurrencies. Maybe they would one day get interested in cryptocurrencies, but there were still obstacles, including how to make their skeptical colleagues understand products like Ethereum conceptually.

Seeming to understand the mood, Bitwise co-founder and CTO Hong Kim gathered the group in an upstairs ballroom to kick off the afternoon with an impromptu speech, acknowledging that there were many definitions of Ethereum floating around, some of which he disagreed with.

Kim then offered his own explanation of Ethereum: a shared public computer, on which users around the world can create shared public programs that no one owns or controls. He compared the system to an “infinite garden,” tended by many gardeners, including the people in the room.

Bitwise CTO Hong Kim receives a commemorative certificate and medal from the New York Stock Exchange. Photo: Sander Lutz for Decrypt

After Kim’s speech, and after the group was led to the exchange for the bell ringing ceremony, several attendees approached Kim to shake his hand and acknowledge his succinct explanation of Ethereum’s long-term promise.

But the Bitwise co-founder acknowledged that even within his own company, his vision for Ethereum wasn’t the only definition most people referred to. ETH, Kim said Decryptstill means a lot of different things to a lot of different people. Part of the reason, he says, is that ETH is “five years behind” an asset like Bitcoin in its technological journey.

“To say that there’s a little bit less fidelity, consensus or agreement on what exactly it is, is a fair statement,” he said of Ethereum.

He paused for a moment, considering the right words.

“But it also describes the broader opportunity that Ethereum offers,” he added.

A few minutes later, everyone was heading to happy hour to commemorate the event. Tourists watched the group of well-dressed executives emerge from the stock exchange steps, chatting among themselves. The gardeners tending to the world’s first public computer looked like any banker heading home for the weekend.

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