Brokerage firm Bernstein has highlighted Ethereum (ETH) as a key focus for potential exchange-traded fund (ETF) approval, following Bitcoin‘s (BTC) successful ETF ventures. In a research report, Bernstein suggests that Ethereum is “probably the only other digital asset likely to get a spot ETF approval by the SEC,” signaling a significant development for the second-largest cryptocurrency.
Outlook for Ethereum ETF Approval:
Probability by May: Bernstein estimates a 50% chance of Ethereum spot ETF approval by May, with a near-certain probability within the next 12 months. This outlook aligns with the growing interest from traditional finance firms in securing approval for an Ethereum ETF in the United States.
Notable Applicants: Financial giants such as Franklin Templeton, BlackRock (BRK), and Fidelity—each having obtained approval for Bitcoin ETFs from the Securities and Exchange Commission (SEC)—have submitted applications for an Ethereum ETF. The involvement of these reputable institutions enhances Ethereum’s medium-term prospects.
Staking Yield Dynamics: Ethereum’s staking yield dynamics, environmentally friendly design, and institutional utility for creating new financial markets position it favorably for mainstream institutional adoption, according to analysts Gautam Chhugani and Mahika Sapra.
Unique ETF Opportunities:
Market Growth: The report suggests that Ethereum yield markets could grow in tandem with the cryptocurrency’s market cap, potentially powering unique ETFs. Including staking yields in ETF design could offer a distinctive investment opportunity for market participants.
Institutional Intentions: Institutions not only aim to launch Ethereum spot ETFs but also seek to “build more transparent and open tokenized financial markets on the Ethereum network.” The utility extends beyond asset gathering, highlighting the broader ambitions of institutional players in the Ethereum ecosystem.
Upcoming Upgrade and Cost Efficiency:
Ethereum Upgrade: Ethereum’s upcoming upgrade, dubbed “DenCun” and scheduled for March, is expected to provide a dedicated corridor and blockspace for roll-ups. This enhancement is anticipated to reduce transaction costs by another 50%-90%, further improving the overall efficiency of the Ethereum network.
As Ethereum gains attention for its potential ETF approval and ongoing network upgrades, the cryptocurrency’s utility, environmental considerations, and institutional appeal are becoming key drivers for its adoption in mainstream financial markets.
