In a landmark decision, the US Securities and Exchange Commission (SEC) has approved the launch of spot Ethereum exchange-traded funds (ETFs), paving the way for institutional investors to gain direct exposure to the world’s second-largest cryptocurrency.
The move comes just five months after the agency gave the green light to spot Bitcoin ETFs, signaling a massive shift in the regulatory landscape for crypto in the US.
TLDR
- The Securities and Exchange Commission (SEC) has approved the launch of spot Ethereum ETFs
- The approval comes just five months after the SEC gave the green light to spot Bitcoin ETFs
- Spot Ethereum ETFs likely won’t begin trading until July or August
- VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest & 21Shares, Invesco & Galaxy, and BlackRock’s iShares Ethereum Trust, have submitted applications for Ethereum ETFs.
- The approval of Ethereum ETFs and the passage of the FIT21 crypto bill suggest a shift in the Biden Administration’s stance on crypto, following former President Trump’s pledge to support the industry.
The SEC’s approval of Ethereum ETFs is expected to bring a substantial influx of institutional capital into the Ethereum market.
Geoff Kendrick, Head of Digital Assets Research at Standard Chartered, predicts inflows of $15 to $45 billion in the first 12 months following the launch of these ETFs.
This increased institutional participation could potentially drive up the price of Ethereum and further solidify its position as a leading digital asset.
@EricBalchunas and I cant see it on the front facing website yet but Phoenix is always right in my experience. https://t.co/xI37RVXqRo
— James Seyffart (@JSeyff) May 23, 2024
However, despite the SEC’s approval, spot Ethereum ETFs likely won’t begin trading until July or August, according to a report by Galaxy Digital.
The delay is attributed to the need for further regulatory approvals and the funds’ greater risk profiles compared to spot Bitcoin ETFs.
The process for approving the funds and listing them on trading platforms could also take longer due to the variety of decentralized applications (dapps) built atop the Ethereum network, which may require additional disclosures.
Several prominent issuers have submitted applications for Ethereum ETFs, including VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest & 21Shares, Invesco & Galaxy, and BlackRock’s iShares Ethereum Trust.
These ETFs are proposed for listing on Nasdaq, NYSE Arca, and Cboe BZX Exchange.
To address SEC concerns, potential issuers have updated their filings to confirm that they will not stake ETH for yield, a practice that has drawn scrutiny from regulators.
The approval of Ethereum ETFs comes amid a broader shift in the regulatory environment for cryptocurrencies in the US. Earlier this week, the House of Representatives passed the FIT21 crypto bill, which aims to establish a comprehensive regulatory framework for digital assets.
The passage of this bill, along with the SEC’s approval of Ethereum ETFs, suggests a change in the Biden Administration’s stance on crypto, following former President Trump’s pledge to support the crypto industry.
The crypto community has been monitoring the developments surrounding Ethereum ETFs, with speculation about their approval intensifying in recent weeks.
Bloomberg analysts Eric Balchunas and James Seyffart had increased the odds of a spot Ethereum ETF being approved this month from 25% to 75%, further fueling market anticipation.
The approval of spot Ethereum ETFs marks a another big milestone in the ongoing evolution of the cryptocurrency industry. After a relentless onslaught from the regulators, including operation chokepoint 2.0 & Gary Gensler and Elizabeth Warren’s personal anti-crypto crusade, it seems like finally the tide is turning in our favor.
2024 is shaping up to be one of the biggest years in history for crypto.
Let’s go!
