SEC approves spot Ethereum ETFs: What does this mean for crypto?

May 24, 2024

The U.S. Securities and Exchange Commission (SEC) recently approved applications from Nasdaq, CBOE and NYSE to list exchange-traded funds (ETFs) linked to the price of ether. This is an important step for the crypto world, as the SEC was expected to reject these applications. In this article, we discuss the implications of this approval and what it means for the future of cryptocurrency ETFs.

Unexpected approval of Ethereum ETFs

Until this week, it appeared that the SEC would reject the applications for spot Ethereum ETFs, given the lack of interaction between the SEC and the applicants. However, in a surprising twist, the SEC began conversations with the applicants earlier this week, asking them to file the 19b-4 forms quickly. This sudden change led to speculation about the SEC's motives. Some suggest that the approval may have political reasons, especially given the recent approval of similar Bitcoin ETFs.

Significance for the crypto market

The approval of Ethereum ETFs is an important milestone for the crypto market. It opens the door for wider acceptance of cryptocurrency in the mainstream financial world. According to Rob Marrocco, head of ETP listings at Cboe Global Markets, the introduction of spot Bitcoin ETFs have already shown significant benefits for both digital assets and the ETF market. Marrocco believes spot Ethereum ETFs will provide similar benefits for U.S. investors.

Andrew Jacobson, vice president and chief legal officer at 21Shares, emphasizes that this approval is a significant step toward trading these products. While there are still some hurdles to overcome, such as the approval of the S-1 registration statements, the current approval of the 19b-4 forms is a promising development.

Future prospects

While approval of the 19b-4 forms is an important step, ETF issuers must still wait for approval of their S-1 registration statements before trading can begin. This process can take several weeks to months, depending on how quickly the SEC requests changes and updates.

Experts such as Bloomberg ETF analyst James Seyffart are optimistic that although the timeline is unclear, hard work can complete this process within a few weeks. However, historical examples show that this process can sometimes take more than three months.

Despite the challenges, the adoption of Ethereum ETFs presents a new opportunity for investors and could have a significant impact on the crypto market. With the increasing acceptance of cryptocurrency products by mainstream financial institutions, the future of digital assets remains promising.

The SEC's decision to approve eight spot Ethereum ETFs, just four months after the approval of spot Bitcoin ETFs, marks an important moment in the evolution of cryptocurrency as a recognized asset class. This is a positive step forward for the industry and may pave the way for further innovations and acceptance in the financial world.