Better Markets, a financial nonprofit organization, has strongly criticized the approval of a spot ether exchange-traded fund (ETF), warning that it could pose a significant risk to the broader financial system. In a letter sent to the Securities and Exchange Commission (SEC), the organization argued that allowing these ETFs would “intertwine the crypto industry with traditional finance,” exacerbating the systemic risks already present due to similar bitcoin products.
Better Markets, which aims to promote the public interest in financial markets and support the reform of Wall Street, expressed concerns about the potential dangers of approving a spot ether ETF. The organization specifically criticized the SEC’s previous approval of a Bitcoin ETF, claiming that it provided a facade of legitimacy for the industry to sell its products to retail investors. Better Markets also highlighted the prevalence of fraud, scams, and abuses within the cryptocurrency sector.
Drawing from the experiences with bitcoin-based products, Better Markets contended that the approval of a spot ether ETF should be avoided. The organization cited the volatility of the underlying asset’s price, even after the introduction of bitcoin ETFs, as evidence to support its position. It argued that ether is just as susceptible to extreme price swings as bitcoin, making investments in ether little more than a gamble.
Moreover, Better Markets cautioned against the potential consequences of approving a spot ether ETF on the traditional financial world, emphasizing that it would further intertwine the crypto industry with traditional finance. This, in turn, would exacerbate the systemic risks resulting from the earlier approval of multiple bitcoin ETFs.
The possibility of approving a spot ether ETF has garnered attention from various analysts and institutions, with some expressing optimism about its eventual approval. However, there are doubts that it will happen as early as May.
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