New BTC and ETH ETFs share similarities, including holding crypto assets regarded as commodities.
Differences include the use cases of the underlying assets, and leadership around those assets.
When spot BTC ETFs went live in the US back in January, it wasn’t yet clear how they would perform, but there was a sense that their launch was an occurrence that–if not exactly inevitable–had been likely to occur at some point.
In the case, though, of spot ETH ETFs, which went into operation last Tuesday, it feels in some ways like a different story. Approval from the SEC came through in May, but that decision surprised many observers. It even prompted speculation that there could have been political motivations at work, since presidential candidate Donald Trump was at that time in the process of establishing a publicly pro-crypto campaign stance.
From there, it didn’t take long to get to launch. 2024 is becoming a year that will be remembered for its crypto ETF developments (don’t forget that two firms–VanEck and 21Shares–have also filed applications with the SEC for spot SOL ETFs). However, it’s becoming apparent that along with similarities between the BTC and ETF products, there are also some key differences.
With that in mind, let’s take a look at the comparable and differentiating aspects. Let's also examine the implications for the products, their underlying assets, and the rest of the crypto space.
How Are the BTC and ETH ETFs Similar?
In the US, there have been ongoing disagreements, mainly between the SEC and almost the entire crypto industry, about whether or not the majority of crypto tokens can be classified as securities and therefore fall under the purview of the SEC. What’s notable is that the SEC appears to want crypto tokens within its remit, and often argues the case for coins as securities, with a few exceptions.
Most obviously, the commission accepts that BTC is best placed in the commodities category, and–although Chair Gary Gensler has been equivocal on the matter–the widespread consensus appears now to be that ETH also can be accepted as a commodity.
In fact, as far back as 2018, then-director of the SEC’s Commission of Corporate Finance William Hinman expressed the opinion that ETH, like BTC, was decentralized enough to be treated as a commodity rather than a security.
Also, in 2023, CFTC Chair Rostin Behnam explained about ETH futures funds, “We would not have allowed the Ether futures product to be listed on a CFTC exchange if we did not feel strongly that it was a commodity asset.”
Another similarity between the BTC and ETH funds lies in how they are affected by Grayscale. In short, prior to spot BTC and ETH ETFs, Grayscale already ran BTC and ETH trusts, both of which have now been converted to ETFs.
However, neither of the converted funds has fees set to be competitive with newcomer ETFs from other firms. Moreover, significant outflows have occurred from the BTC product, and the same process appears to be happening with the ETH product.
The new BTC ETFs had such strong, sustained inflows that they have been able to thrive despite the Grayscale overhang. However, it remains to be seen whether the ETH products can also produce the demand necessary to immediately offset any short-term Grayscale outflows, should they continue to occur.
Another similarity lies in the way Bitcoin is being publicly praised by BlackRock CEO Larry Fink. At the same time BlackRock’s tokenized treasuries fund, BUIDL, runs on the Ethereum blockchain. To long-term crypto users–who have weathered countless criticisms and dismissals through the years from establishment sources–this is a rapid turn of events. Nevertheless, it’s telling that Fink and BlackRock currently reserve the lengths of their crypto-asset adoption to BTC and ETH.
How Are the BTC and ETH ETFs Different?
One area in which the ETFs differ from one another is around the narratives driving interest in their respective underlying assets. Bitcoin, at the moment, is frequently promoted as a store of value that can be regarded–as Larry Fink has stated–as digital gold, and which also, for example in El Salvador, can be a working currency.
Ethereum, on the other hand, was described in a recent BlackRock ETH ETF promotional video as “a global platform for applications that run without decentralized intermediaries”. The same video directly contrasts BTC’s “scarcity” with ETH’s “utility”.
Finally, one more notable difference stems from the fact that Bitcoin has no identifiable founder. As such, its most prominent advocates operate as adopters leading by example rather than as technicians. That means persuasive individuals such as MicroStrategy Executive Chairman Michael Saylor, President of El Salvador Nayib Bukele, and now also BlackRock’s Larry Fink, make the public case for BTC. This makes it a little more like gold again, which, after all, has no CEO explaining his invention in the media circuit.
ETH, on the other hand, has Vitalik Buterin, a famous and still-active co-founder regarded as a figurehead for the blockchain. This sometimes results in misunderstandings. Investors from a traditional business and finance background may wonder why Buterin is not in the spotlight promoting ETH now that the ETFs are freshly launched. At the same time, to crypto-natives this sounds strange: Ethereum is a decentralized network and, according to a common kind of crypto ethos, should always be moving away from hierarchical leadership.
However, if it’s not Vitalik Buterin’s job to promote ETH (just as it’s not the job of the pseudonymous and long-absent Bitcoin creator Satoshi Nakamoto to promote BTC), then who, if anyone, should be doing that job? Does Ethereum need a Michael Saylor-type figure pushing its value proposition and taking the bet in real time?
That depends on who you ask. Perhaps ETF issuers–as through the above-mentioned BlackRock video–will take up the task. Alternatively, perhaps crypto will always operate by its novel conventions, and traditional finance will adapt accordingly.
When spot BTC ETFs went live in the US back in January, it wasn’t yet clear how they would perform, but there was a sense that their launch was an occurrence that–if not exactly inevitable–had been likely to occur at some point.
In the case, though, of spot ETH ETFs, which went into operation last Tuesday, it feels in some ways like a different story. Approval from the SEC came through in May, but that decision surprised many observers. It even prompted speculation that there could have been political motivations at work, since presidential candidate Donald Trump was at that time in the process of establishing a publicly pro-crypto campaign stance.
From there, it didn’t take long to get to launch. 2024 is becoming a year that will be remembered for its crypto ETF developments (don’t forget that two firms–VanEck and 21Shares–have also filed applications with the SEC for spot SOL ETFs). However, it’s becoming apparent that along with similarities between the BTC and ETF products, there are also some key differences.
With that in mind, let’s take a look at the comparable and differentiating aspects. Let's also examine the implications for the products, their underlying assets, and the rest of the crypto space.
How Are the BTC and ETH ETFs Similar?
In the US, there have been ongoing disagreements, mainly between the SEC and almost the entire crypto industry, about whether or not the majority of crypto tokens can be classified as securities and therefore fall under the purview of the SEC. What’s notable is that the SEC appears to want crypto tokens within its remit, and often argues the case for coins as securities, with a few exceptions.
Most obviously, the commission accepts that BTC is best placed in the commodities category, and–although Chair Gary Gensler has been equivocal on the matter–the widespread consensus appears now to be that ETH also can be accepted as a commodity.
In fact, as far back as 2018, then-director of the SEC’s Commission of Corporate Finance William Hinman expressed the opinion that ETH, like BTC, was decentralized enough to be treated as a commodity rather than a security.
Also, in 2023, CFTC Chair Rostin Behnam explained about ETH futures funds, “We would not have allowed the Ether futures product to be listed on a CFTC exchange if we did not feel strongly that it was a commodity asset.”
Another similarity between the BTC and ETH funds lies in how they are affected by Grayscale. In short, prior to spot BTC and ETH ETFs, Grayscale already ran BTC and ETH trusts, both of which have now been converted to ETFs.
However, neither of the converted funds has fees set to be competitive with newcomer ETFs from other firms. Moreover, significant outflows have occurred from the BTC product, and the same process appears to be happening with the ETH product.
The new BTC ETFs had such strong, sustained inflows that they have been able to thrive despite the Grayscale overhang. However, it remains to be seen whether the ETH products can also produce the demand necessary to immediately offset any short-term Grayscale outflows, should they continue to occur.
Another similarity lies in the way Bitcoin is being publicly praised by BlackRock CEO Larry Fink. At the same time BlackRock’s tokenized treasuries fund, BUIDL, runs on the Ethereum blockchain. To long-term crypto users–who have weathered countless criticisms and dismissals through the years from establishment sources–this is a rapid turn of events. Nevertheless, it’s telling that Fink and BlackRock currently reserve the lengths of their crypto-asset adoption to BTC and ETH.
How Are the BTC and ETH ETFs Different?
One area in which the ETFs differ from one another is around the narratives driving interest in their respective underlying assets. Bitcoin, at the moment, is frequently promoted as a store of value that can be regarded–as Larry Fink has stated–as digital gold, and which also, for example in El Salvador, can be a working currency.
Ethereum, on the other hand, was described in a recent BlackRock ETH ETF promotional video as “a global platform for applications that run without decentralized intermediaries”. The same video directly contrasts BTC’s “scarcity” with ETH’s “utility”.
Finally, one more notable difference stems from the fact that Bitcoin has no identifiable founder. As such, its most prominent advocates operate as adopters leading by example rather than as technicians. That means persuasive individuals such as MicroStrategy Executive Chairman Michael Saylor, President of El Salvador Nayib Bukele, and now also BlackRock’s Larry Fink, make the public case for BTC. This makes it a little more like gold again, which, after all, has no CEO explaining his invention in the media circuit.
ETH, on the other hand, has Vitalik Buterin, a famous and still-active co-founder regarded as a figurehead for the blockchain. This sometimes results in misunderstandings. Investors from a traditional business and finance background may wonder why Buterin is not in the spotlight promoting ETH now that the ETFs are freshly launched. At the same time, to crypto-natives this sounds strange: Ethereum is a decentralized network and, according to a common kind of crypto ethos, should always be moving away from hierarchical leadership.
However, if it’s not Vitalik Buterin’s job to promote ETH (just as it’s not the job of the pseudonymous and long-absent Bitcoin creator Satoshi Nakamoto to promote BTC), then who, if anyone, should be doing that job? Does Ethereum need a Michael Saylor-type figure pushing its value proposition and taking the bet in real time?
That depends on who you ask. Perhaps ETF issuers–as through the above-mentioned BlackRock video–will take up the task. Alternatively, perhaps crypto will always operate by its novel conventions, and traditional finance will adapt accordingly.
Sam White is a writer and journalist from the UK who covers cryptocurrencies and web3, with a particular interest in NFTs and the crossover between art and finance. His work, on a wide variety of topics, has appeared on platforms including The Spectator, Vice and Hacker Noon.
MoonPay Lands AUSTRAC Registration for Aussie Crypto Services
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
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As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
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Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
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In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
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Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
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Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
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In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
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Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
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Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
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IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
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For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
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