Bitwise Files Application for Ethereum Spot ETF Amidst Growing Competition

Reports says, crypto investment firm Bitwise submitted an application to the Securities and Exchange Commission (SEC) for the launch of a spot Ethereum Exchange-Traded Fund (ETF). This move by Bitwise adds to the intensifying competition among companies striving to introduce the inaugural Ethereum spot ETF, hot on the heels of successful Bitcoin spot ETF debuts earlier this year.

According to the S-1 registration form lodged by Bitwise, the proposed “Bitwise Ethereum Trust” aims to hold Ethereum (ETF) while potentially engaging in staking activities through reputable staking providers to garner additional rewards. Staking, a practice under regulatory scrutiny, involves locking up ether to fortify the Ethereum network and validate transactions, with participants earning newly minted ether as incentives.

Bitwise’s foray into the Ethereum spot ETF landscape coincides with heightened interest from traditional financial institutions. In recent times, industry behemoths like BlackRock, digital currency investment giant Grayscale, and VanEck have all submitted proposals to the SEC for their own Ethereum spot ETFs. This surge in competition underscores the anticipated demand for such offerings, as investors clamor for exposure to the second-largest cryptocurrency without the hassle of direct procurement and storage.

The filing comes shortly after a Bitwise executive voiced skepticism about the prospects of SEC approval for an Ethereum spot ETF this summer, contrary to widespread expectations—suggesting that a later launch could be advantageous.

“Spot Ethereum ETFs will garner more assets if they debut in December compared to May,” tweeted Matt Hougan, Chief Investment Officer at Bitwise. “Traditional Finance (TradFi) needs more time to digest the Bitcoin ETFs.”

The SEC has deferred decisions on several high-profile Ethereum spot ETF applications in recent months, including those from BlackRock, Grayscale, Fidelity, Invesco, and Galaxy Digital. Initially projected by analysts like James Seyffart of Bloomberg to extend until May 23, the deadline for the earliest applications from VanEck and Cathie Wood’s Ark Invest, there’s now speculation that they could face rejection.

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