Late last week, the US Securities and Exchange Commission (SEC) cleared the way for the approval of spot Ethereum ETFs. The SEC approved 19b-4 forms for ETFs from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. This approval brings Ethereum-based ETFs one step closer to reality.
“Ethereum (ETH) is currently in the spotlight,” says Hao Yang, head of financial products at Bybit. The SEC asked applicants for the ETH ETF to update their filings this week, increasing the odds of approval. Although ETH has faced challenges, this move suggests a potential turnaround.
The surprise approval marks a significant shift at the SEC. Many expected the SEC to decline the applications. Additionally, Zina Ashour, founder of Women in Crypto Arabia, states, “The green light for Ethereum ETFs highlights Ethereum’s status as a non-security.” This distinction exempts it from strict regulations, broadening investment opportunities.
Ashour believes the SEC’s move could set a precedent for other cryptocurrencies. “The SEC’s endorsement of these ETFs is a turning point for the wider cryptosphere,” she says. So, the approval will likely drive institutional investment into Ethereum, simplifying the purchase and storage process for investors.
Enhanced liquidity from these ETFs could stabilize prices, making Ethereum a more attractive investment. Ashour points out that over 20,000 altcoins exist in its ecosystem. The approval could spark increased interest and investment in these altcoins.
The SEC’s approval of Ethereum ETF forms follows the approval of spot Bitcoin ETFs in January, which now hold over 1 million Bitcoin. As news of the approval spread, Bitcoin and Ethereum prices initially dropped due to traders selling the news after buying the rumour.
While prices have since risen, Yang believes fluctuations will continue until the ETF decision is finalized. Also, market analysts speculate that the approval of Ethereum ETFs could pave the way for more crypto-based ETFs, potentially including Solana and XRP.
The approval is a symbolic victory for crypto. Many believe the SEC’s change of heart is influenced by US politics. “The political landscape favours a friendlier regulatory environment for crypto,” says Yang. A recent Harris Poll found that 33% of US voters consider a candidate’s position on crypto important. Thus, even Ethereum co-founder Joe Lubin believes the approval and the crypto-friendly political climate in the US are game changers.
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