Less Chance of Ether ETF: Insights from Recharge Capital Founder

The approval of an Ether exchange-traded fund (ETF) in the United States is uncertain, according to John Lo, the founder of Recharge Capital. Lo believes that the Securities and Exchange Commission (SEC) will scrutinize upcoming crypto-based ETFs, especially those based on Ether. He suggests that the SEC may feel pressured to approve the Bitcoin ETFs due to their case with Grayscale, and therefore consider the approval of these ETFs as a loss. Companies such as BlackRock, Grayscale, Fidelity, and VanEck are competing for an Ether ETF, with deadlines for the SEC’s decision ranging from May 23 to August 7. Lo suggests that even without an ETF, Ethereum will continue to thrive due to its innovation and network upgrades. He highlights the growing use cases and alternative financial systems being built on the Ethereum network.

Lo also points out that decentralized finance (DeFi) applications have faced criticism for their poor user experience, making them difficult for beginners and institutions to use. This lack of user-friendly interfaces has hindered institutional participation in the DeFi sector. Lo acknowledges that significant progress has been made in improving user experience in the industry. He also highlights the high cost of user acquisition as a limiting factor for the DeFi industry. The high cost, which can reach $10 to $12 per user, makes it challenging for startups and protocols to attract a large number of users.

Despite these challenges, Ethereum remains a hub for DeFi activity. The total value locked on the Ethereum network has increased by 80.3% over the past year, reaching $51 billion as of March 18, as reported by DefiLlama. There has been a 21.6% growth in the number of unique wallet addresses on the Ethereum network, according to Etherscan data. This indicates the ongoing growth and interest in the DeFi ecosystem on the Ethereum network.