The approval of spot Ether exchange-traded funds (ETFs) could be delayed beyond the final deadline in May, as large financial institutions lack the internal strategy to position for approval, Robby Greenfield, the CEO of smart money protocol Umoja, told Cointelegraph.
“What makes it difficult for institutions to position themselves advantageously with Bitcoin, Ether and cryptocurrencies generally is that they can’t facilitate the same market manipulating functions as with previous commodities. You can’t create paper Bitcoin like you can create paper gold.”
Companies vying for an Ether (ETH) ETF include BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex and Franklin Templeton.
Bloomberg ETF analyst James Seyffart expects the current Ether ETF approvals to be declined in late May, according to a March 19 X post.
The United States Securities and Exchange Commission (SEC) postponed its decision on the Hashdex and ARK 21Shares spot Ether ETFs on March 19. Both ETF applications have a final deadline for a decision in late May.
Due to the decentralized nature of cryptocurrencies like Ether, creating institutional strategies for ETFs is more difficult. While a delay is likely, the Ether ETF approvals are just a matter of time, according to Greenfield:
“Whether it gets approved in May or in December, it’s inevitable… I wouldn’t understand why it wouldn’t be approved, particularly given that even the SEC’s perspective on Ether has been increasingly one of it being a commodity rather than a security.”
The SEC must decide on VanEck’s application by May 23, ARK 21Shares’ by May 24, Hashdex’s by May 30, Grayscale’s by June 18 and Invesco’s by July 5. Fidelity and BlackRock’s applications must be decided by Aug. 3 and Aug. 7, respectively.
Related: CoinShares acquires Valkyrie’s ETF business
Beyond spot Ether ETFs, large institutional players are still hesitant to invest in decentralized finance (DeFi) due to a lack of infrastructure, which also holds back traditional retail investor participation, Greenfield told Cointelegraph:
“Institutional capital won’t touch DeFi unless there are processes and guarantees in place for them to be comfortable. True retail investors won’t touch DeFi unless there’s a better user experience, so more simple infrastructure is necessary.”
According to Greenfield, enabling retail access to smart investment strategies is important because individual investors have had less access to wealth management tools than institutions.
To provide wider retail access to asset management strategies, Umoja closed a $2 million extension to its initial seed funding round, bringing the total amount to $4 million.
“If you look at all the assets under management on the planet, 52% of it belongs to retail. So retail investors have more money to put into wealth creation but the least opportunities by far.”
Retail investors accounted for 52% of global assets under management in 2021, which is projected to grow to 61% by 2030, according to estimates by the World Economic Forum.
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