In an exclusive interview with Cointelegraph, Bill Qian, chairman of Cypher Capital and former global head of fundraising at Binance Labs, disclosed that Wall Street firms are prioritizing Ether ETFs over crypto natives due to the lucrative management fees associated with ETFs.
According to Qian, it’s not the crypto natives but rather Wall Street firms and large financial institutions that are spearheading the push for the approval of spot Ether exchange-traded funds (ETFs). He emphasized that institutional asset management companies are the primary lobbyists driving this endeavor. Their motive stems from a strategic interest in boosting their assets under management (AUM), which can be significantly augmented through ETF approval.
Qian revealed to Cointelegraph during the interview.“In the end, the key lobbyists would be the institutional asset management companies. It is in their best interest to launch the ETF and to get the ETF approved, because they are in a game of the AUM [assets under management], and to increase their AUM, they need to get approval for the ETFs.”
Among the prominent contenders vying for a position in the Ether ETF market are BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton.
The United States Securities and Exchange Commission (SEC) has deferred its verdict on VanEck’s ETF application until May 23. Additionally, the decisions on the Hashdex and ARK 21Shares spot Ether ETFs, initially slated for March 19, have been postponed. Both ETF applications await final decisions, expected to be announced in late May.
Though the green light for the Ether ETF would undoubtedly be celebrated by crypto natives, Bill Qian highlights that major issuers hold a more significant stake in its approval, primarily due to the potential for generating ETF-related fees, as per Qian’s statement:
“It’s Wall Street firms who want to make this happen to generate an ETF management fee.”
Grayscale’s Bitcoin ETF boasts the highest fee at 1.5%, eclipsing competitors like BlackRock and Fidelity, which offer fees of 0.25% and 21Shares at 0.21%, respectively.
Leading up to the approval of spot Bitcoin ETFs, numerous applicants diligently revised their S-1 filings multiple times, striving to reduce their ETF fees in a fierce competition to provide clients with the most competitive rates.
Among the 10 ETF issuers, Bitwise stands out for its exceptionally low fees, presenting ETFs with zero fees for the initial six months and assets totaling $1 billion, followed by a modest 0.20% fee thereafter.
Qian suggests a promising outlook for a spot Ether ETF’s approval this year, citing substantial demand from BlackRock, the world’s largest asset manager boasting trillions of dollars in capital.
According to a March 19 X post, James Seyffart, an ETF analyst at Bloomberg, anticipates that the existing approvals for Ether ETFs will likely be rejected by late May.
To watch the interview with Bill Qian, chairman of Cypher Capital, conducted by Cointelegraph, please follow the provided link.