Ether ETF Approval Likely Delayed to May amid Institutional Strategy Challenges
Summary:
The approval for Ether exchange-traded funds (ETFs) may be delayed to May as key financial institutions lack the proper strategies, according to Robby Greenfield, CEO of Umoja. He explains that these institutions are finding it difficult to implement market manipulation techniques they typically use with traditional commodities. Notable entities such as BlackRock and Fidelity are lined up for their Ether ETFs to be reviewed. However, Greenfield sees these approvals as inevitable, stating that the delay is due in part to the complex, decentralized nature of cryptocurrencies. Meanwhile, hesitance persists in institutional investment in decentralized finance due to inadequate infrastructure, restricting participation from mainstream retail investors.
The greenlight for Ether exchange-traded funds (ETFs) could be postponed until May, as major financial institutions struggle to conceptualize strategies suitable for approval, according to Robby Greenfield, CEO of Umoja, a smart money protocol. He explained to Cointelegraph that these institutions face difficulties positioning themselves favorably due to the inability to apply the same market manipulation techniques used with traditional commodities. Several companies, including BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton are competing to offer an Ether (ETH) ETF. However, James Seyffart, a Bloomberg ETF analyst, speculates that the current applications will be rebuffed in late May.
On March 19, just a few days shy of the final deadline, the decision by the United States Securities and Exchange Commission (SEC) regarding spot Ether ETFs by Hashdex and ARK 21Shares was delayed. These applications face a final reckoning in late May. Greenfield suggests this delay is almost certain due to the complex, decentralized nature of cryptocurrencies, yet affirms his belief that the approval of Ether ETFs is merely a formality. He sees approval as inevitable, whether in May or December.
The applications by VanEck, ARK 21Shares, Hashdex, Grayscale, and Invesco are awaiting confirmation due by May 23, May 24, May 30, June 18, and July 5 respectively. Meanwhile, the applications of Fidelity and BlackRock are slated for a decision by August 3 and August 7.
Despite this, major institutional entities remain tentative about investing in decentralized finance (DeFi), primarily due to the insufficient infrastructure, which also curtails participation from conventional retail investors. Unless simplification of infrastructure occurs, Greenfield predicts institutional capital and regular investors will keep their distance from DeFi investments.
Citing the need for broader access to wise investment strategies for retail investors, who have traditionally had limited access to wealth management tools, Umoja has raised $2 million in addition to its initial seed capital, totalling at $4 million. Greenfield argues that retail investors, while holding 52% of all assets under management in 2021, have far fewer opportunities for wealth creation. Predictions by the World Economic Forum suggest this percentage may climb to 61% by 2030.
Published At
3/20/2024 2:04:46 PM
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