SEC has approved the first spot of Ethereum exchange-traded funds. This approval is a landmark event for the crypto industry.
The U.S. Securities and Exchange Commission (SEC) has approved the first spot of Ethereum exchange-traded funds (ETFs), marking a significant milestone for the cryptocurrency industry. This decision allows asset managers such as Grayscale, Fidelity, and Bitwise to launch ETFs that directly track the price of Ethereum (ETH).
BOOM!! APPROVED! There it is. The SEC just approved spot #Ethereum ETFs. What a turn of events. It's really happening.
h/t @PhoenixTrades_ pic.twitter.com/KQ39mDyCbT
— James Seyffart (@JSeyff) May 23, 2024
Following the announcement, Ethereum saw a 1.32% increase and was trading at $3,797, according to CryptocurrenciesToWatch data. The SEC’s approval comes after a period of uncertainty and skepticism among market analysts. Bloomberg analyst Eric Balchunas had previously estimated only a 25% chance of approval by May 23, noting the SEC’s lack of engagement compared to the Bitcoin ETF approval process.
The Ethereum ETFs Approval
The SEC has approved 19b-4 forms for Ethereum ETFs from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. However, before trading can commence, these ETF issuers must have their S-1 registration statements go into effect.
The SEC has recently begun conversations with issuers regarding their S-1 forms, but the duration of this process remains uncertain. Some analysts speculate that it could take weeks.
Bloomberg ETF analyst James Seyffart commented, “I think that if they work extremely hard, it can be done within a couple of weeks, but there are plenty of examples of this process taking 3+ months historically.”
The approval of Ethereum ETFs follows a rigorous application process and extensive market analysis. Grayscale’s Chief Legal Officer, Craig Salm, noted that the SEC had already addressed key issues during the approval of spot Bitcoin ETFs, which are also relevant for Ethereum ETFs. These issues include the creation and redemption processes, cash versus in-kind transactions, and custody concerns. Salm emphasized that the SEC’s prior engagement with Bitcoin ETF issuers laid the groundwork for Ethereum ETFs, highlighting the strong correlation between ETH futures and spot prices as a compelling factor for approval.
This approval is a landmark event for the crypto industry, reflecting the growing interest in crypto-asset financial products among traditional investment firms. As the market responds to this development, stakeholders will closely monitor the performance and impact of these newly approved ETFs.
