- Major exchanges like Nasdaq, CBOE, and NYSE have been directed to update their ETF applications by the SEC.
- Approval could enhance Ethereum’s market stability and accessibility by linking it with traditional financial systems.
The SEC is nearing a decision on the approval of the first spot Ethereum exchange-traded funds (ETFs) in the United States. Barron’s reports suggest that the SEC might finalize its decision on the approval of spot Ethereum ETFs within this week, ending a review period of 240 days.
SEC staff on Monday told exchanges where the products would list that it is leaning toward approving them, according to people familiar with the matter.
The agency provided comments on the applications that, if resolved in time, could result in approvals as soon as this week.…
— db (@tier10k) May 21, 2024
The SEC has reached out to major U.S. exchanges such as the Chicago Board Options Exchange (CBOE), Nasdaq , and the NYSE. This communication aims to ensure that their applications for listing and trading spot Ether ETFs are updated and fully detailed.
The application by VanEck for a spot Ether ETF is under consideration, with a decision due by May 23. Approval of this application might lead to further approvals for similar ETFs from other asset managers like ARK 21Shares, BlackRock, Fidelity, Hashdex, and Invesco Galaxy. Notably, Fidelity has modified its application to state that the Ether in their ETF will not be staked, which could be a condition for approval.
Exchange-traded funds (ETFs) provide a method for investors to buy Ethereum through traditional investment channels, potentially making Ethereum more accessible to the general investing public. Approval of these ETFs could also stabilize Ethereum’s price by increasing liquidity.
The anticipation of SEC approval has influenced Ethereum’s market price, which recently increased to $3,735. This rise reflects heightened investor confidence in potential regulatory approval. However, opinions in the cryptocurrency community vary.
If they approve the Ethereum ETF, they are approving the entire industry.
This is the last dam to be broken.
— Pomp 🌪 (@APompliano) May 21, 2024
Anthony Pompliano, a prominent figure in the cryptocurrency industry, tweeted that approval of the Ethereum ETF would signal broader acceptance of the cryptocurrency industry by mainstream financial markets.
Despite the optimism, several regulatory challenges persist
The SEC’s classification of Ethereum as a security remains a potential barrier to approval. Moreover, the SEC, led by Gary Gensler who is known for his cautious approach to cryptocurrency, has historically demonstrated rigorous regulatory scrutiny, adding an element of unpredictability to the approval process.
As the May 23 deadline approaches, the SEC’s decision on spot Ethereum ETFs is highly anticipated, with potential significant implications for the cryptocurrency market and broader financial systems.
