US investment management firm VanEck believes a spot Ethereum exchange-traded fund (ETF) could outgrow similar Bitcoin products after the US Securities and Exchange Commission (SEC) approves it in the coming months.
In a recent interview, Pranav Kanade, portfolio manager at VanEck, one of the issuers of the spot Bitcoin ETF launched in January, said that the Ethereum ETF could attract more demand due to its larger market size than the Bitcoin ETF. .
Ethereum ETF Could Outperform Bitcoin ETF
Kanade’s beliefs contrast with some members of the cryptocurrency community who think the Ethereum ETF will not make much sense because it does not allow for staking rewards distribution. Remember that Ethereum switched to a proof-of-stake protocol in 2022. Ethereum (ETH) holders can earn a variety of profits by staking their assets on the blockchain.
Market analysts believe that cryptocurrency investors should buy and stake their own ETH rather than investing in ETFs. But Kanade claims otherwise.
“The world of investors looking for cash-producing assets is vast, and ETH clearly generates fees that are passed on to token holders. “I think ETH may make more sense as an asset to more people than Bitcoin because even if there is no ETF that can offer staking as part of it, it is still a cash-producing asset,” he said.
VanEck portfolio manager believes an Ethereum ETF could outperform a Bitcoin fund, but sees such a feat as a mammoth task considering the spot Bitcoin ETF received inflows exceeding $11 billion within two months of launch. there is.
50% chance of SEC Ethereum ETF approval
In addition to Kanade’s controversial belief that the Ethereum ETF will outperform the Bitcoin fund, he also puts a 50% chance of the SEC approving the former, as opposed to a 30% prediction by Bloomberg analysts.
Considering that the SEC was legally forced to approve a spot Bitcoin ETF following the Grayscale court ruling, it is unlikely that the agency will be eager to approve a similar product for Ethereum.
Nonetheless, agency member Hester Pierce, popularly known as Crypto Mom, believes regulators will not need a lawsuit or court order to approve the pending application for an Ethereum ETF.
Meanwhile, VanEck recently lowered the management fee for its Bitcoin ETF, HODL, from 0.2% to 0% in a bid to attract more investors to the product. The current fees will remain in place until March 2025, or until HODL has amassed $1.5 billion in assets under management.
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