ETFs on Ethereum are arriving. Will they be able to revive the tepid cryptocurrency markets?

Not one to show his cards, SEC Chairman Gary Gensler nevertheless gave an optimistic forecast on Ethereum ETFs yesterday, as might be expected, Speaking of at the Bloomberg Invest conference. Among his usual cold statements about the cryptocurrency industry, including accusing his interviewer of chasing “clicks,” Gensler said the process of working with issuers is “going smoothly.”

Gensler’s rare acquiescence appears to confirm Bloomberg’s predictions fortune tellers that ETFs could launch as early as July 2. With crypto assets from Coinbase to Bitcoin craterization in recent days, could the arrival of an Ethereum ETF reinvigorate the bull market? After all, approval and launch of Bitcoin ETFs in January served as the catalyst for the current rally.

The short answer is: probably not. Ethereum has always been Bitcoin’s least-loved little brother, even with its new smart contract capability, improved transactions, staking, and a host of other benefits. It’s been years since anyone predicted the “flippening” (that legendary day when Ethereum overtook Bitcoin) with a straight face.

I met with Christopher Perkins, president of VC firm CoinFund, who told me that one of the main challenges for Ethereum will be branding. Bitcoin is easy. The proto-cryptocurrency has claimed the nickname “digital gold,” which any investor can understand. A baby boomer looking for where to allocate the millions of dollars earned from the sale of a home purchased in 1970 for $10,000, however, may have difficulty understanding Ethereum’s value proposition. What exactly is a smart contract and why should we care? “Those boomers, with the money, they don’t ape things,” Perkins told me.

Even with the hype around the Bitcoin ETF, we are seeing slow adoption as investors become increasingly comfortable with the new asset class. As Perkins said, ETFs offer two main benefits: regulatory certainty combined with operational scalability or improved user experience. Bitcoin, thanks to its initial designation as a commodity, has never really been in a regulatory gray area, although ETFs have made it easier for people to purchase them directly in their brokerage accounts, rather than setting up a Coinbase account or Robinhood. With Ethereum, however, the approval and launch of ETFs really creates a safety moat that didn’t exist before, especially after months of speculation that the SEC would reject applications.

Additionally, an Ethereum ETF that offers yield could be a game changer, if the SEC ever approves it. Last year, Perkins led a project to provide a benchmark rate for Ethereum staking yields, which he noted are often higher than Treasury rates when adjusted for inflation. “The ETF is going to be very important, but it’s also imperfect because it will deprive investors of that yield,” he said.

So if Ethereum ETFs finally arrive next week, or soon after, don’t expect a spike in adoption. But Perkins said he takes a long-term view: “This is just another step towards integration and reducing regulatory risk.”

Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz

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