Earlier today, the U.S. Securities and Exchange Commission (SEC) approved a 19b-4 fill for eight spot Ethereum exchange-traded funds (ETFs), paving the way for institutional adoption of the second most valuable coin.
The decision comes after months of uncertainty, less than six months after regulators approved a spot Bitcoin ETF. Despite everything the cryptocurrency community can remember this week, regulators uncharacteristically “scrambled” and rushed to communicate with ETF issuers to find them and fix their applications.
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Did MicroStrategy make a mistake choosing Bitcoin over Ethereum?
There is currently one analyst on X, as a spot Ethereum ETF is likely to be launched in the coming weeks. think Michael Saylor, former CEO of MicroStrategy, missed out on a big reward by choosing Bitcoin over Ethereum. As of May 24, MicroStrategy, a business intelligence company and currently one of the largest publicly traded companies in the United States, has been increasing its BTC holdings over the years.
According to Bitcoin Treasury BondsMicroStrategy is the largest public company holding BTC, managing 214,400 BTC, worth over $14 billion at press time.
But with the US SEC getting the ball rolling on a spot Ethereum ETF, analysts are now pointing to hypothetical scenarios. If MicroStrategy had chosen ETH over BTC, its holdings would have been worth more than $19 billion at spot exchange rates.
This level would mean MicroStrategy would rise by more than $4 billion. Assuming business intelligence companies choose to buy rather than hold, their total holdings would be worth more than $20.9 billion as of the end of May 2024.
ETH Trading at Deep Discounts: Can BTC’s Success Be Replicated?
Looking at the aftermath of the acceptance and trading of the spot Bitcoin ETF, it has become clear that the Ethereum price may be significantly undervalued at spot rates. After a brief decline in mid-January, BTC prices surged, sending Ethereum prices as high as $4,100. In contrast, the world’s most valuable coin topped $70,000, hitting an all-time high of about $74,000.
With Form 19b-4s approved for eight ETF issuers, including BlackRock and Fidelity, the only hurdle is approval of the S-1 registration statement. There may be delays this round. However, with the approval of the US SEC, spot Ethereum ETF shares will begin trading.
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Nonetheless, it is important to note that issuers of spot Ethereum ETFs hold ETH through regulated custodians rather than through equity.
Featured image by DALLE, chart by TradingView