Ethereum ETF Approval Uncertain, SEC Expected to Intensify Scrutiny: John Lo
Summary:
John Lo, founder of Recharge Capital, in an interview with Cointelegraph, anticipates more rigorous examination from the SEC for future Ether ETFs compared to the previously approved Bitcoin ETFs. He believes that regardless of SEC's decision, Ethereum's future is secure due to constant innovation and development in the network. Furthermore, he notes that DeFi platforms need to simplify their user experience to attract more institutional involvement and highlights the high user acquisition costs which restrict the expansion of DeFi user base. Despite these hurdles, Ethereum remains a vibrant hub for DeFi activity.
It's less clear whether a spot Ether exchange-traded fund will receive approval, compared to previously approved spot Bitcoin ETFs, according to Recharge Capital's founder, John Lo, during an exclusive chat with Cointelegraph. He anticipates that the Securities and Exchange Commission (SEC) will examine future crypto-based ETF proposals more closely, Ether ETFs in particular: “As the SEC was arguably compelled to approve Bitcoin ETFs through their dealings with Grayscale, scrutiny on cryptocurrency ETFs has intensified. It's likely perceived by the SEC as a significant internal defeat.”
Several firms, including BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton, are contending for an Ether ETF. The SEC must make decisions by May 23 for VanEck, May 24 for ARK 21Shares, May 30 for Hashdex, June 18 for Grayscale, and July 5 for Invesco. Decisions for Fidelity and BlackRock must be made by August 3 and August 7, respectively.
Lo believes that despite potential rejection by the securities regulator, Ethereum's future is secure without an Ether ETF. This is attributed to the network's swift development, innovations, and recent updates. "Regardless of an ETF's presence, Ethereum will prevail. It has demonstrated a plethora of innovation, applications, and already hosts alternative finance systems, which is truly exciting."
Decentralized finance (DeFi) platforms are often criticized for their complex user experience, rendering them unfriendly for crypto newcomers. Lo suggests this is a major obstacle deterring institutional involvement. "User experience is indubitably a considerable bottleneck...We're witnessing immense growth in this sector in its attempts to simplify crypto entry for retail and institutional players."
Lo also notes that the prohibitive cost of acquiring users restricts the expansion of DeFi users: “User acquisition costs range from $10 to $12 per user, which many startups or protocols aren't able to afford. That's why we're seeing limited user numbers in DeFi.”
Ethereum is nonetheless a vibrant hub for DeFi. Over the past year, the total value locked (TVL) in the Ethereum network increased by 80.3% to $51 billion as of March 18, as per DefiLlama. Etherscan data reveals that the number of distinct wallet addresses expanded by 21.6% to 115,934 in the same period.
Published At
3/18/2024 7:01:38 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.