The Securities and Exchange Commission (SEC) has given the green light to Ethereum ETFs, marking a significant milestone in the adoption of cryptocurrencies.
This approval opens doors for institutional investors to gain exposure to Ethereum, the second-largest cryptocurrency by market capitalization.
The SEC's decision is a major win for the crypto community, which has been advocating for greater regulatory clarity.
Investors can now expect to see Ethereum ETFs listed on major exchanges, providing a new way to buy and sell Ethereum.
Recommended read: U.s. Investors Are Increasingly Planning to Invest in Crypto Etfs
Sec Approval
The SEC approval of Ethereum ETFs is a significant development for the crypto industry. The Securities and Exchange Commission gave its blessing to a fund that tracks the price of Ether, the most valuable cryptocurrency after Bitcoin.
This approval allows a group of exchanges to begin listing investment products known as exchange-traded funds, or ETFs, linked to the price of Ether. The products would offer an easier and simpler way for people to invest in crypto.
Related reading: Ether Futures Etfs
The SEC must also approve a separate set of applications from companies that want to issue the ETFs, including from major financial firms like BlackRock and Franklin Templeton. This process could take weeks or months.
Industry critics called the approval a dangerous development that would encourage wider investment in a volatile market. The S.E.C. failed to live up to its mission to protect investors and the markets.
The approval of Ethereum ETFs could take longer to hit the market than the approval of Bitcoin ETFs, which led to a flurry of new investment and helped propel Bitcoin's price to a record high.
For more insights, see: Gold Etf vs Bitcoin Etf
Key Takeaways
The SEC has approved spot ether ETFs to begin trading on Tuesday, July 23, 2024, after receiving a final approval from the U.S. Securities and Exchange Commission.
Eight spot ether ETFs have been cleared for trading, including the 21Shares Core Ethereum ETF, the Bitwise Ethereum ETF, and the Fidelity Ethereum Fund.
For your interest: Sec Approves Spot Etfs
These ETFs will provide a broader array of institutional and retail investors with a means to invest in ether, but they will not be able to stake ether, which may impact their performance.
According to one analyst, 20-25% of the inflows seen by the spot bitcoin ETFs this year are expected to be seen in the spot ether ETFs.
The SEC's approval of spot ether ETFs is a significant development, but questions still remain regarding the legal status of ether when it is staked.
Here are the eight spot ether ETFs that have been cleared for trading:
- 21Shares Core Ethereum ETF (CETH)
- Bitwise Ethereum ETF (ETHW)
- Fidelity Ethereum Fund (FETH)
- Franklin Ethereum Trust (EZET)
- Invesco Galaxy Ethereum ETF (QETH)
- iShares Ethereum Trust ETF (ETHA)
- VanEck Ethereum ETF (ETHV)
- Grayscale Ethereum Trust (ETHE)
- Grayscale Ethereum Mini Trust (ETH)
Ethereum Market
The Ethereum market is expected to see significant growth with the approval of spot ether ETFs. These funds are likely to attract around 20% to 25% of the flows that spot bitcoin ETFs saw in their first few months of existence.
Spot ether ETFs are poised to drive ether prices to a record above $5,000. This prediction was made by Bitwise Chief Investment Officer Matt Hougan in recent commentary.
If this caught your attention, see: U.s. Sec Approves Exchanges' Applications to List Ether Etfs
Frequently Asked Questions
Will Ethereum ETF get approved?
Approved spot Ethereum ETFs are already available on major U.S. exchanges, indicating a positive trend for future approvals
Will the Ethereum ETF be approved?
The Ethereum ETF has been approved by the SEC for major U.S. exchanges. It will start trading on July 23, 2024.
Is Ethereum a security SEC?
No, the SEC has closed its investigation into Ethereum 2.0, determining that sales of ETH are not securities transactions. This ruling does not apply to all Ethereum-related activities, and further clarification may be necessary for investors and users.
Sources
- https://www.investors.com/news/ethereum-etf-sec-approval/
- https://www.nytimes.com/2024/05/23/technology/ether-etf-sec.html
- https://www.mayerbrown.com/en/insights/publications/2024/05/sec-approves-listings-of-spot-ether-etfs-waiting-is-the-hardest-part
- https://www.investopedia.com/sec-approves-spot-ether-etfs-8678873
- https://www.ft.com/content/f36d7eeb-03d6-4dab-909a-d5d4524a4edb
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