Now, two companies, VanEck and Wisdom Tree, have joined the race for an Ethereum ETF, with a longer coverage of risks, including consensus mechanism shift, energy-intensive mining raising the economic and societal costs of mining, congestion in-network, and more.
- WisdomTree is the latest one and the second to file for an Ethereum exchange-traded fund (ETF) after VanEck.
According to the filing with the Securities and Exchange Commission (SEC), Wisdom Ethereum Trust has named Cboe BZX Exchange as the exchange to list the ETF under a to-be-determined ticker symbol if approved. The ETF specialist firm hasn’t picked a crypto custodian yet.
WisdomTree has already filed for a Bitcoin ETF, but the US regulator has yet to approve a single one in the country. In Canada, several Bitcoin ETFs and Ether ETFs have been approved and are already demonstrating a spectacular performance making the US companies excited and competitive to be the ones to launch the investment vehicle first to gain the first-mover advantage.
While several, at least nine Bitcoin ETFs have been filed in the US, lately, Ether has also joined the race amidst the bull run as the crypto market matures and the second-largest cryptocurrency grabs the attention.
As we reported recently, JPMorgan, Goldman Sachs, and billionaire investor Carl Icahn have come in support of Ethereum, finding it more valuable as a payments system and a store of value than Bitcoin.
Besides the usual risks, this time, in regards to Ethereum, the firm also covered several more, including hard fork, its energy-intensive mining, raising concerns about climate change that may raise the economic and societal costs of mining, moving from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism, new competing blockchain networks posing a challenge and competition from central bank digital currencies (CBDCs).
Congestion or delay in the Ethereum network delaying purchases or sales of ether by the Trust, scaling challenges and efforts to increase the volume of transactions not turning out to be successful, and miners acting in collusion to raise transaction fees adversely affecting the usage of the Ethereum network, are also covered as potential risks for the loss in the value of the Trust.