The most-anticipated Ethereum spot ETFs are already making significant strides in ETH demand in the market. In this respect, Consensys and Ethereum co-founder Joe Lubin has stated that a demand spike will pave the way for a significant supply crunch. The US Securities and Exchange Commission appears determined to authorize spot ETF of Ethereum at the moment.

Ethereum’s Joe Lubin Warns about an ETH Supply Crunch amid the Rise in Demand

Keeping this in view, the demand for ETH has risen to a great extent. Lubin also discussed the entities that have obtained exposure to BTC via its newly launched exchange. As per him, they will potentially intend to diversify with the latest ETH ETFs. This whole scenario will likely put substantial pressure on the purchase of Ether via ETFs. On the other hand, the executive clarified that the supply will be quite low to meet the demand.

He added that this situation will be very different than the approval of BTC ETFs back in January this year. In the case of Bitcoin, validated participants could just buy idle tokens via over-the-counter platforms and exchanges. However, the on-chain statistics disclose that the stakers have already staked above twenty-seven percent of the cumulative ETH supply. The owners have reportedly locked this amount in contracts to earn yields.

In simple words, the market value of Ether is much decreased than Bitcoin’s. Moreover, the price of the token also reacts more to inflows. Moreover, a great portion of ETH supply is inaccessible for ETF use. Additionally, the renewed Ethereum activity will lead to the burning of ETH supply in a huge quantity over time. This will further pressurize the supply of the token.

SEC’s Sudden Shift Concerning ETH ETFs May Be Political Motivation as Elections Near

On the other hand, the reports signify that the SEC has suddenly started showing interest in authorizing the ETH ETFs. Just a couple of weeks back, the securities regulator was displaying no such intention at all. Recently, the trading & market division of the SEC conversed with the exchanges, informing them about the approval of 19b-4s.

According to familiar sources, the agency is leaning toward potentially approving 19b-4s, indicating a total shift. Some of the onlookers think that this might be part of a political turn. Subsequently, the issuers dealing with S-1s started calling the SEC. Nevertheless, the corporation finance division of the SEC was reportedly not ready for that move. Some speculate that the change of heart in the case of the SEC could have a political motivation as the elections are nearing.