Experts are arguing whether the permission of Ethereum (ETH) ETFs in the United States will have the same influence on the market as the adoption of Bitcoin (BTC) ETFs, as the likelihood of their approval grows. The biggest cryptocurrency index fund manager in the world, Bitwise, thinks not. According to analyst Juan Leon, most institutional investors are still unaware of the distinctions between Bitcoin and Ethereum, even if many of them have grown more knowledgeable and open to using BTC as an investment vehicle.
According to Leon, advisors find it useful to compare Bitcoin to an asset allocation like to gold and Ethereum to a fast-growing tech stock. ETFs will have a greater impact on the price of Bitcoin than Ether, according to Bitwise CIO Matt Hougan for two reasons: Since its utility is more in line with what an ETF provides, Bitcoin is probably going to be approved first. An ETF has no bearing on Ethereum’s functionality, which is its greatest asset.
In the long run, Leon thinks institutional interest in ETH will increase despite the current lack of understanding. He points out that financial advisors who are aware of ETH perceive its benefits, especially for staking, which gives users income flows similar to dividends that Bitcoin does not. They also acknowledge that ETH serves as a platform for smart contracts that powers a strong decentralised app store, while BTC’s primary function is that of a store of value. Bitwise is one of several asset managers vying for regulatory approval of a Bitcoin spot ETF, including BlackRock and Fidelity.