A Coinbase analyst believes that the market might be underestimating the potential timing and likelihood of an Ethereum exchange-traded fund (ETF) approval. David Han, a cryptocurrency analyst at Coinbase, suggested that Ethereum could surprise the market in the coming months.
Han commented that the main question is not whether such products will emerge, but when they will be approved. He highlighted potential reasons why an Ethereum ETF might face challenges, mainly due to the differences between Ethereum and Bitcoin and Ethereum's adoption of the Proof-of-Stake mechanism.
Furthermore, the analyst pointed out that Ethereum does not face significant sources of excess supply, such as coin unlocks or miner pressure. "On the contrary, staking and the expansion of Layer 2 solutions have significantly absorbed Ethereum liquidity. In our view, Ethereum’s position as the hub of decentralized finance is unlikely to be displaced due to the proliferation of EVM-compatible networks," added Han.
Han also discussed the launch of Ethereum funds with a staking feature, noting that such products are unlikely to be approved in the near future.
It's important to note that the first deadline for Ethereum ETF applications is set for May 23, 2024. Han believes that if the U.S. Securities and Exchange Commission (SEC) does not approve these products, there is a high chance that legal challenges could overturn this decision. Additionally, he noted that not all applications necessarily need to be approved simultaneously.
Previously, Bloomberg Intelligence analyst Eric Balchunas stated that the approval of spot Ethereum ETFs might depend on the outcomes of the U.S. presidential elections.
