First Ethereum ETF coming to the USA in 2022
As you would have probably heard, the US just approved the first bitcoin ETF in 2021, four years after it was first tendered. The Securities and Exchange Chairman cited security risk and the risk of volatility as the major reason for their decision to deny every bitcoin ETF prior to the approval of the ProShares Bitcoin Strategy ETF ($BITO) in 2021. Although the ETF is not what many people expected, the expectation was to have a bitcoin spot ETF, but the $BITO is a bitcoin Futures ETF; the ETF got widespread acceptance as it passed $1 billion AUM in the first four trading days. While the fight still continues for the first bitcoin spot ETF, Ethereum does not have any ETF presence in the United States of America. American investors who are interested in gaining exposure to Ethereum without buying the token directly would have to look into the foreign markets (notably the European markets and Canada) before they can buy the token. That is expected to change as there are speculations we might see the first Ethereum ETF in the USA in the first quarter of 2022. Unsurprisingly, it is going to be a futures ETF. While we wait for that to happen, US citizens have no other choice but to look up Ethereum ETFs at the foreign markets.
While the ETFs in both the Canadian and European markets track the spot price of the Ethereum token, the European Ethereum ETFs struggled in getting volume during the second half of 2021, while its Canadian counterparts flourished in volume, indicating a surge in the demand for Ethereum-based ETFs in the Northern American country. The closest guess is that the US traders are maximizng their proximity with canada to buy her Ethereum spot ETFs.
In other news, the Australian government is getting into the crypto wave. They announced that it is partnering with 21Shares, a swiss-based company, to launch the first Australian Ethereum ETF. The details of the project are still unknown, and so is its launch date.
Ethereum to the moon?
If all things go well, 2022 is the year ethereum bulls can successfully shout “to the moon.” There are many upgrades surrounding the ethereum cryptocurrency, and two of the major ones include the Ethereum ETF in the USA and the launch of the Ethereum 2.0. Van Eck had their Bitcoin ETF rejected by the SEC late in 2021, but they have pursued having an Ethereum-based ETF, or rather, having the first Ethereum-based ETF in the United States. Analysts from Bloomberg are optimistic about the prospect of an ETF tracking Ethereum. While they didn’t outrightly dismiss a spot-tracking ETF, keeping our expectations low on an Ethereum-futures ETF is smart. This is expected to be seen in the first three months of 2022, and another major project hitting the Ethereum protocol later in the year is the ETH 2.0.
Ethereum has been attacked massively, not by DDoS attacks, but by other protocols offering the same features as Ethereum, but doing it cheaper, faster, and with a more environmentally-friendly appeal. The traffic congestion on the network took the transaction fees to a record-high of $62. This made the protocol unsuitable for retail investors, and the clamors for green earth have made the token the subject of criticism along with bitcoin. To solve the problems, Ethereum is working on launching the Eth 2.0, which is simply ethereum on the proof-of-stake consensus. The project is expected to be completed in the fourth quarter of 2022 after being plagued by several hiccups. Details on the ethereum 2.0 can be seen on the eth block explorer as over 8.7 million ETH tokens, and 278,000 validators are present on the upgrade. Late in 2021, the beacon chain merged with the Mainnet after the token started burning half of the trading fees in a bid to become deflationary, indicating that the work is more than 50% completed. The implication of the much anticipated Ethereum ETF in the US and the ETH 2.0 will take the Ether price to heights never-before-seen.
What does the strong demand for Ethereum indicate?
While the decline of volume in the Ethereum ETF market in Europe might be a signal of oversaturation, the increase in Canadian counterpart might be linked to investors from the United States seeing Canada as a close option to invest in Ethereum ETFs. The atmosphere around Ethereum, both as a token and as a protocol, has been more optimistic seeing the progress with the Eth 2.0, and while things are not expected to change anytime soon, the heightened interest in Canada’s Ethereum ETFs suggest many investors are placing their bets on the ETFs increasing when the ETH 2.0 causes Ethereum’s token price to increase. It might also suggest that the US market is ripe for an EThereum ETF, and crypto adoption has spread past what can be measured with statistics. Seeing how Bitcoin reacted to the news of the first US Bitcoin ETF, it would be surprising if Ethereum does not follow that same trend. Pending that time, you can stake Ethereum 2.0 on https://redot.com/eth2/.
