Based on the saga prospective Bitcoin ETF issuers have gone through, U.S. securities regulators would likely have to approve a spot Ether ETF, said Bloomberg analyst Eric Balchunas.

Ether rallied past $2,000 for the first time sine April on Thursday after it was revealed in a filing to the Nasdaq exchange that BlackRock, the world’s largest asset manager, is planning to launch an ETH ETF, the iShares Ethereum Trust.

Balchunas said that the Securities and Exchange Commission will likely have to approve an ETF linked to the spot price of Ethereum’s native token, Ether, because it has already approved Ether futures ETFs.

“I don’t see any reason for them to deny Ether given they have approved Ether futures,” Balchunas said on The Defiant podcast, published Monday. “They could open themselves up to another lawsuit.”

The D.C. Circuit Court of Appeals ruled in August that the SEC was “arbitrary and capricious” in its decision to reject Grayscale’s attempt to turn its Grayscale Bitcoin Trust into a spot ETF. The appeals court found that the SEC would be treating GBTC differently than similar products, such as Bitcoin futures ETFs.

At least seven Ether futures ETFs debuted last month.

Subdued Demand

Balchunas said approval of a spot Ether product would likely come after the launch of a Bitcoin ETF, some time in mid to late 2024.

Still, with demand for Ether futures ETFs proving to be subdued, and global demand for spot Ether ETFs at around 20% the demand for Bitcoin ETFs, Balchunas said asset managers won’t be rushing in.

“Most people don’t get Ethereum, whereas Bitcoin, they can be like, okay, got it, digital gold,” Balchunas said. “Time and time again, advisors have generally shunned more complicated things they don’t understand.”