Introduction

On March 28, Bitwise submitted an application for a spot Ethereum ETF to the SEC. The fund, called Bitwise Ethereum ETF, aims to provide exposure to the value of ETH held in its trust, similar to other applications currently in process.

In the application submitted by Bitwise, details such as the plan to list on the NYSE Arca exchange and to use Coinbase Custody as a custodian were included. However, information regarding the ticker and fees was not disclosed.

One key aspect discussed in Bitwise’s application is Ethereum staking, but unlike competing applications, there was no mention of the fund staking ETH to earn returns. Other applicants, such as Ark 21Shares and Fidelity, have elaborated on this strategy.

Additionally, NYSE Arca filed a 19b-4 document on the same day proposing a rule change to list Bitwise’s spot Ethereum ETF. A highlighted analysis in the filing showed a strong correlation between the ETH spot market and the CME ETH futures market, similar to the argument made for the approval of Bitcoin ETFs.

Despite Bitwise’s efforts, the probability of approval for spot Ethereum ETFs remains low as recognized by Bloomberg analyst Eric Balchunas. The lack of signals from SEC that led to the approval of Bitcoin ETFs reduces the likelihood of Ethereum ETFs approval by May 23. Other asset managers, along with Bitwise, also have pending applications awaiting SEC decisions.