Morgan Creek CEO Skeptical of Imminent Approval for Spot Ethereum ETFs

SEC is unlikely to approve spot Ethereum ETFs in the near future, despite optimism following the approval of similar Bitcoin products in the U.S. This was stated by Morgan Creek Capital CEO Mark Yusko in an interview with Cointelegraph.

Previously, Bloomberg exchange analyst Eric Balchunas suggested a 70% likelihood of approval for several Ethereum fund applications by May.

However, Yusko disagreed with this assessment:

“I would say it’s less than 50/50.”

In his view, the SEC remains quite hostile towards cryptocurrencies. This was confirmed by the agency’s head, Gary Gensler, in his statements following the approval of Bitcoin funds, according to the Morgan Creek co-founder.

Another obstacle, Yusko notes, is that the Commission may still consider Ethereum a security. Bitcoin, however, is clearly classified by the agency as a commodity.

The head of BlackRock, one of the potential issuers of a spot exchange-traded fund based on Ether, Larry Fink, acknowledged the “value” of such products from a tokenization perspective. However, he expressed doubt that digital assets will ever become currencies.

The SEC’s decision to approve exchange-traded Bitcoin funds has faced criticism or skepticism from some top officials.

Risks Associated with Bitcoin ETF Approval

Industry experts highlighted specific risks that these investment products pose to the ecosystem of the first cryptocurrency. 

Former BitMEX CEO Arthur Hayes noted that spot exchange-traded crypto funds allow for various strategies at the intersection of the digital asset market and TradFi.

Yusko believes that the emergence of Bitcoin funds will sharply reduce the volatility of the underlying asset and, consequently, its potential returns. However, he sees this as a sign of the “maturation of the asset,” which investors should welcome.

“Bitcoin was not invented for day trading, but to allow everyone to transfer value without censorship,” emphasized the head of Morgan Creek.

He described the volatility of cryptocurrency as an integral aspect of development and an important marker of the transition from an experimental stage to an established asset class.

Bitcoin Price Predictions

Yusko reaffirmed his assessment of Bitcoin’s current fair price at $50,000. He believes the cryptocurrency will reach this level by the halving, as miners need to maintain breakeven in cryptocurrency mining.

After the block reward is halved, the price is expected to adjust upwards and likely reach “six-figure values,” the investor suggests.

However, he predicts that price movements will be less sharp compared to previous cycles.

Following the approval of spot exchange-traded funds, Bitcoin experienced a correction, falling below the $43,000 level. Analysts pointed to the risk of a decline to levels near $38,000.

Nevertheless, some market participants expect the cryptocurrency to grow significantly after the halving. Fundstrat co-founder Tom Lee suggested that the price could reach $150,000 by the end of 2024. Over a five-year horizon, he forecasted a price up to $500,000.

CEO of ARK Invest, Cathie Wood, offered a more optimistic estimate — $1.5 million by 2030. Even the bearish scenario from her firm’s specialists suggests $258,500.

Earlier, analysts from investment bank TD Cowen also expressed doubts about the imminent approval of spot Ethereum ETFs.