US approves spot Ethereum ETFs
Dramatic 180 from the SEC means ETH joins Bitcoin as second cryptocurrency to get an ETF.
It seemed unlikely mere days ago, but the US Securities and Exchange Commission (SEC) has now approved spot Ethereum ETF (exchange-traded funds).
It's a surprise win for the second-largest crypto and the crypto industry as a whole, and the second big win this week. A pro-crypto regulatory bill passed the US House of Representatives with bipartisan support on Wednesday.
"Today's approval by the U.S. SEC not only cements Ethereum's legitimacy as an asset, but it also enhances the status, accessibility and growth potential of the wider digital asset ecosystem," said Ben Rose, general manager of Binance Australia.
When will Ethereum ETFs start trading?
Unfortunately, there's one more regulatory fence that needs to be cleared before the ETFs begin trading.
Companies looking to offer spot ETH ETFs need to file an S-1 form, which also needs to be approved by the SEC, before they can begin offering ETFs.
This process can take anywhere from weeks to months, and there's not necessarily any guarantee they will be approved at all.
'There is likely to be a gap before we see S-1 approvals and these ETFs begin trading. My guess is that this will take at least a week, but likely more," said James Seyffart, ETF analyst at Bloomberg Intelligence.
"If history is any guide it could be much longer and be measured in months. But I personally think the gap will be measured in weeks."
What crypto will be next to get ETF approval?
It's hard to say, but the approval of ETH ETFs definitely paves the wayside for other cryptocurrencies to receive ETF approval.
Widespread speculation suggests Solana and Dogecoin could be the next in line, but no ETF issuers has currently submitted an application for either.
What did this do to the price of Ethereum?
Surprisingly little. Ethereum (ETH) briefly moved past US$3,900 before settling around $3,800 (at the time of writing).
However, it had already jumped 20% earlier in the week when rumours first emerged that the SEC was likely to approve the ETF applications.
While spot Bitcoin ETFs had a marked impact on the price of BTC, this may not be the case for Ethereum. ETH holders can currently stake their ETH tokens in return for rewards, which ETF holders would not receive.
This means investors may opt to buy spot ETH instead of an ETF in order to benefit from staking rewards.
Who is likely to offer Ethereum ETFs?
- BlackRock
- Fidelity
- Grayscale
- VanEck
- Franklin Templeton
- Ark/21Shares
- Invesco/Galaxy
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