Arthur Cheong Discusses Impact of Ether ETFs on Retail Market

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• Over 70% of spot Bitcoin ETF positions are held by retail investors, indicating strong potential for ETH ETFs.
• Despite SEC approval for Ether ETFs, Ethereum’s price has shown only modest increases, reflecting cautious market response.

The introduction of spot Ether (ETH) ETFs holds potential to significantly engage retail investors, similar to the wave of interest seen in 2017 when Ethereum first captured mainstream attention. This outlook is shared by Arthur Cheong, Chief Investment Officer and co-founder of Asian venture capital firm DeFiance Capital. 

Cheong expressed optimism about the retail market’s response to these new exchange-traded products following the preliminary approval of U.S. spot ETH ETFs.

More than 70% of spot BTC ETF are held by retail, and when I was retail the first crypto I bought was ETH. Lots of normie like XRP because of the fintech narrative as well. Most 2017 cohort joined crypto because of Ethereum as well.

Cant imagine retail wont get excited by ETH;…

— Arthur (@Arthur_0x) May 25, 2024

Recalling the surge in cryptocurrency interest in 2017, Cheong noted that Ethereum played a pivotal role in attracting new investors to the market. During that period, the allure of blockchain technology and its applications drew many first-time investors into the crypto space. 

According to Cheong, Ethereum continues to hold a central place in the digital asset realm, maintaining its relevance and appeal among both new and seasoned investors.

Furthermore, Cheong pointed out that retail investors currently hold over 70% of all spot Bitcoin ETF positions, indicating a strong retail interest in such products. This statistic underscores the potential for a similar or greater level of enthusiasm for Ethereum-based ETFs. 

Industry insiders anticipate that operators of these ETFs will actively promote these offerings to retail investors, aiming to replicate the success seen with Bitcoin ETFs.

Cant imagine retail wont get excited by ETH; the decentralized technology layer powering Web 3.0 economy.

On the regulatory front, the SEC recently approved the preliminary 19b-4s forms for Ether ETFs on May 23, 2024. However, the more comprehensive S-1 forms are still pending approval, which are essential for the full operational launch of these ETFs.

Despite the regulatory advancements, the price of Ethereum has shown tepid reactions. Following the approval, Ethereum’s price dipped from $3,830 to $3,670, and as of the latest data, it stands at $3,743 on major exchanges. 

This represents a modest 0.89% increase over the last 24 hours, lagging behind the broader market’s performance benchmark of 1.9%.

The development and approval of Ether ETFs are seen not just as a regulatory progression but as a potential catalyst for bringing a new wave of retail investors into the crypto market. 

As the sector evolves, the response of retail investors to these new products will be important in determining their impact on the broader market and Ethereum’s positioning within it. 

The enthusiasm observed in similar past instances offers a promising sign for the adoption and success of Ether ETFs among retail participants.