Smart crypto is bearish on a near-term ether ETF approval, Crystal writes.

The big picture: Folks in and out of the industry have cut the odds on approval below a coin flip, despite the 60% gain in ETH prices over the last 30 days and bullish vibes in the digital assets market.

• "It brings me no joy to be an ETH ETF bear," Jake Chervinsky, chief legal officer of the Variant Fund, said yesterday on social media.
• "Same. Ppl equating my approval bearishness as being btc maxi," Eric Balchunas, senior ETF analyst at Bloomberg, said in response.

By the numbers: Bloomberg's Balchunas now puts odds of approval by May at 35%, down from 70% in January.

Between the lines: The decline in sentiment can largely be attributed to two things: Silence from the SEC on the issue, and the differences between ETH's ETF situation, and that of bitcoin's at this point in its process.

• Wall Street and Crypto Twitter lit up like a disco ball leading to the Jan. 10 approval of spot bitcoin ETFs — there was chatter around details of the launches.
• There hasn't been much talk about ETH ETFs in comparison.
• "Intel not good," Balchunas tells Axios. "We thought [the SEC] would've issued comments by now."

With bitcoin ETFs, the SEC punted on applications for roughly a decade, mostly citing concerns of market manipulation.

• It's unlikely that the regulator uses that reason again, as a court ruling vacated that decision.
• On the flip side, if the SEC rejects ETH ETF applications with a different reason — it's less likely to be sued this time.
• "Less motivation for a lawsuit," Balchunas tells Axios.

Zoom in: First, because there aren't a bunch of ETH trust investors mad about being stuck in one.

• Second, the SEC approved ETH futures ETFs in October — none of which forced the SEC to issue a decision on a 19b-4 application, which was what Grayscale's bitcoin ETF lawsuit took aim at.

The other side: When SEC commissioner Hester Peirce was asked about where the SEC is on ETH ETF approval at ETHDenver two weeks ago, she gave a lawyerly answer, saying the applications were being considered.

• She added that the SEC was still in "enforcement only" mode and recommended reading the spot bitcoin ETF comments from SEC chair Gary Gensler and commissioner Caroline Crenshaw "to get a sense of the world we're in right now."

Between the lines: Chair Gensler cited the Grayscale ruling for deciding that a spot bitcoin ETF approval was the "most sustainable path forward."

• Commissioner Crenshaw dissented.

The intrigue: Gensler has previously argued that ether might be considered a security after its transition to proof-of-stake in 2022, though he has since stopped short of categorizing it in any one way.

• During a House financial services hearing last year, Gensler evaded Rep. Patrick McHenry's questions on whether ETH was a security.

Digital asset investment products are snapping up superlatives, Crystal writes.

The big picture: Already this year, bitcoin ETFs and other crypto-linked funds gathered $10.3 billion, just shy of last year's total haul of $10.7 billion, according to a recent CoinShares report.

• The group set a record for weekly inflows as BTC reached new all-time highs.

Between the lines: The world's largest digital asset accounts for a huge chunk of that activity, but other big market cap tokens are getting some attention too.

• SOL funds took in $24 million in inflows last week after a bout of outflows — maybe Pantera's interest in FTX's stash is helping.

💭 Crystal's thought bubble: Big flows into the various spot bitcoin ETFs are great for the issuers seeing some of that action, but it isn't necessarily great for their customers. (Read more below👇)

BlackRock's IBIT raking in more than $10 billion in assets has the world agog — though it means that IBIT investors will be paying more in fees now that the initial fee waiver no longer applies, Crystal writes.

The big picture: Most of the 10 spot bitcoin ETFs took fees to zero in the battle for billions — but that was only for a certain time, and/or until a threshold in assets was reached in the battle for billions.

What we're watching: Grayscale is the only holdout that has neither cut fees nor offered a fee waiver for its ETF, GBTC.

• It is taking a different path.

Zoom in: Fidelity's Wise Origin Bitcoin ETF, or FBTC, has the longest discount among the funds with more than $1 billion in assets.

• It's waiving fees until August 2024, then will start charging an annual fee of 0.25%.

Between the lines: Spot bitcoin ETFs from Bitwise, WisdomTree, Invesco Galaxy, Valkyrie and Franklin all sport 0% fees right after their respective deals are applied, but they won't last much longer.

• BlackRock's IBIT and ARK 21Shares ARKB met the assets threshold early and now charge 0.25% and 0.21%, respectively.
• Bitwise, WisdomTree and Invesco Galaxy haven't triggered their assets thresholds, but their six-month fee waivers end in July.
• Valkyrie will start charging 0.25% after their three-month fee waiver ends April 10.
• Franklin's waiver runs as long as Fidelity's but is much smaller.

Catch up quick: VanEck announced yesterday that it would waive its 0.20% starting today for the first $1.5 billion in assets or until March 31, 2025.

🇳🇬 Nigeria is blaming Binance for crashing its currency. (Wall Street Journal)

🇪🇺 The European Parliament voted to approve new sanctions rules that would apply to crypto. (CoinDesk)

🍩 Kickstarter's ill-fated pivot to an also-ran blockchain. (Fortune)

When I signed up for a newsletter called Echo Beach by ETF veteran and "free agent financial futurist" Dave Nadig I looked forward to getting kernels of wisdom in my inbox (just like you get from us!), Crystal writes.

• 📬 To my surprise, a lime-colored zine called "85bb65" arrived in my actual mailbox peppered with thoughts about AI, the future of western democratic capitalism, QR codes to research, and a Spotify playlist.

Fun fact: 85bb65 is the HTML code for dollar-bill green.

Zoom in: The zine's "investment marketing AI" made me lol and reminded me of how dumb and generative Wall Street copy can be.

• Six dice rolls later, here's my investment ad-libbed copy for the next BIG thing: Our new DeFi protocol...promises to generate income... by leveraging proprietary data... while seeking capital appreciation. We believe it will stack Benjamins for us.

💭 Crystal's thought bubble: Crypto's obsession with ETFs... tracks.