John Lo, the founder of Recharge Capital, shared insights with Cointelegraph regarding the future of Ether exchange-traded funds (ETFs) in the U.S., emphasizing a less certain path compared to the previously approved Bitcoin ETFs.
He anticipates that the Securities and Exchange Commission (SEC) will intensify its examination of all forthcoming crypto-based ETFs, particularly those related to Ether.
Lo highlighted, “Scrutiny towards cryptocurrency ETFs has only grown, as you could argue to a certain degree that the SEC was forced to approve the Bitcoin ETFs because of its case with Grayscale.
No doubt, the SEC internally views that as a huge loss for themselves.”
Several firms, including BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton, are in the race to launch an Ether ETF.
Critical dates loom for the SEC to make decisions on these applications, with deadlines spanning from May 23 for VanEck, to August 7 for BlackRock.
Despite potential regulatory hurdles, Lo is optimistic about Ethereum’s resilience, attributing its strength to the platform’s innovative capabilities and recent upgrades.
He stated, “Whether or not there’s an ETF, Ethereum will be fine.
“I think it’s coming out with lots of innovation, use cases, and we’ve already seen alternative financial systems being built on the [network], which is incredibly interesting.”
Lo also touched upon the challenges within the decentralized finance (DeFi) sector, particularly the obstacles related to user experience that deter both institutional and retail participation.
He believes that the complex nature of DeFi services and the high cost of user acquisition, estimated at $10 to $12 per user, are significant barriers limiting DeFi’s user base.
Despite these challenges, Ethereum continues to thrive as a central hub for DeFi activities.
The total value locked (TVL) in Ethereum’s DeFi protocols surged 80.3% over the past year, reaching $51 billion as of March 18, with a 21.6% increase in unique wallet addresses, signaling sustained growth and interest in the ecosystem.
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