By Wealth management firm Bernstein suggested Ethereum (ETH) may be the only digital asset after Bitcoin (BTC) to secure a spot ETF.
In a Feb 19 research paper, Bernstein discussed Ethereum’s prospects in the coming months in terms of staking rewards, possible institutional inflows, and an ETF approval.
According to the report, the leading altcoin might become the only other cryptocurrency to have a spot ETF after Bitcoin. This comes after several firms have made moves toward securing approval for a spot Ethereum ETF.
Analysts at the firm suggest that there is a 50% chance for an ETH ETF approval by May while adding that this is an almost certain probability by the end of the year.
Like Bitcoin, institutional investors are keen on Ethereum for many reasons, the main among which is its vast decentralized finance (DeFi) ecosystem.
Ethereum’s network remains the leading smart contract network, attracting a diverse range of decentralized applications (dApps).
“Ethereum with its staking yield dynamics, environmentally friendly design, and institutional utility to build new financial markets, is well positioned for mainstream institutional adoption.”
Moves Toward an Ethereum ETF
This year, the digital asset market has seen developments pointing to companies’ increased interest in a spot Ethereum ETF.
Following the approval of Bitcoin spot ETFs by the Securities and Exchange Commission (SEC), analysts believe ETH is next.
Bloomberg analyst James Seyffart suggested a decision will be made on May 23. Big-name firms such as BlackRock, VanEck, Hashdex, and Grayscale are seeking approval from the SEC.
Franklin Templeton just joined the spot #Ethereum ETF race. pic.twitter.com/zJvk9seXe3
— James Seyffart (@JSeyff) February 12, 2024
Recently, Franklin Templeton joined the race for an ETH ETF approval as more investors look towards the second-ranked asset. Although other assets have recorded huge inflows, approval is likely to end with the top two assets only.
In a recent interview, Cathie Wood, the CEO of ARK Invest expressed a similar sentiment, stating that the SEC is unlikely to approve more ETFs outside Bitcoin and Ethereum.
Aside from being the second largest cryptocurrency, Ethereum stands out with its proof-of-stake consensus mechanism, allowing transaction validators to earnin yield by staking ETH.
Investors Eye Ethereum Growth
In recent months, Bitcoin’s growth has outpaced Ethereum, but many commentators still view ETH’s growth prospects with optimism.
A significant reason for Bitcoin’s massive inflow over ETH is linked to ETF figures, so a similar move from the altcoin giant can reignite a rebound.
Last year, institutional firms projected Ethereum as the crypto asset with the highest growth potential. The survey was conducted when Ethereum saw significant outflows on the institutional front.
Similarly, Coinbase market research shows momentum building for Ethereum as more firms look towards a spot ETF. At press time, ETH exchanges hands at $2,912, a 7.2% growth in the last seven days.
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