VanEck Predicts Ethereum ETFs May Surpass Bitcoin ETFs in Popularity

Experts clash over appeal sans staking rewards

As the SEC's ether ETF verdict nears, a clash erupts over such a product's viability. Naysayers argue removing ether's core staking functionality undermines investment sense when investors can stake directly.

Not so, counters VanEck's Pranav Kanade. He envisions ether ETF demand potentially outstripping this year's blockbuster bitcoin funds, given ether's "cash producing" nature via transaction fees paid to holders.

"ETH could make more sense as an asset to more people than Bitcoin," Kanade reasons, contrasting it with non-yielding bitcoin.

Still, approval seems tenuous. Bloomberg slashed odds to 30%, though Kanade sees a 50% chance. Ethereum's circa 3% Coinbase staking yields aside, regulators may deem removing that core utility unpalatable.

In a bid to woo assets, VanEck axed fees on its Bitcoin Trust HODL until 2025 or $1.5 billion AUM. The gambit turbocharged inflows - HODL swelled from $300 million to over $500 million and 7,200 bitcoins in days.

While currently just 1% of VanEck's AUM, CEO Jan Van Eck targets a 15% crypto allocation "sooner rather than later," says Kanade. An ether ETF could accelerate that trajectory - if regulators greenlight the contentious structure.

The quandary boils down to centralized liquidity versus decentralized functionality. Funneling demand through an ETF privatizes ether's rewards, constraining its base layer utility.