Exchange-traded-funds designed to track the spot price of Ethereum are now trading on U.S. stock markets in the latest landmark event for cryptocurrency investors.
“There was a time period when all of the issuers thought this wasn’t going to happen and that it would be a potentially long wait,” said Katherine Dowling, chief compliance officer and general counsel at Bitwise Asset Management, in an interview with BNN Bloomberg on Tuesday.
Bitwise is one of eight asset managers that saw their Ethereum ETFs given the green light to commence trading by the U.S. Securities and Exchange Commission on Monday evening, and it began trading on Tuesday.
Within barely a day of trading, Bloomberg reports the ETFs launched Tuesday have already amassed more than US$10 billion in assets.
“[They] are out there and they are doing well, thriving in the market” Dowling said.
Political balancing act
It’s a momentous development for crypto investors but it almost didn’t happen due to the uncertainty as to whether or not regulators would recognize Ethereum as a security. “The thought was, we are going to have to wait until that plays out in other areas, like the courts,” Dowling said. “Then, political winds put some wind behind the sails. Suddenly the 19b-4s forms were approved for a number of issuers at the same time.”
Some of those political winds were blowing from the direction of Donald Trump, the Republican nominee for U.S. president, who has called himself the ‘crypto president’ at fundraisers in the past couple of months.
Dowling said Bitwise does not expect the outcome of the election to have a great impact on how far cryptocurrency can go this year.
“It is great that candidate Trump has come out and embraced crypto, as has his running mate, [but] we are about to see what Kamala Harris could bring to that. Is she also going to come out and embrace crypto? I know a number of lobbyists are after that and looking to get her to make a statement, so it’ll be really interesting to see.”
Dowling said she believes there would be little difference in crypto markets whether a Republican or Democratic administration is at the helm.
“I tend to think there are enough Democrats out there that will help make sure the new administration, if it is a Democratic administration, embraces crypto and moves it forward. I think the momentum is there from both sides of the aisle.”
Regulation is key
As for what happens next, Dowling says it’s important for the industry to maintain a dialogue with regulators to ensure proper regulations are in place.
“The SEC needs to do their job in terms of looking and testing to make sure there won’t be fraud in the market; and we want them to do that job,” she said. “Bitwise has always had an active dialogue with the SEC, we think it is of the utmost importance.”
