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Spot Ethereum ETFs Under SEC Scrutiny: Grayscale, Fidelity, and Bitwise Applications Open for Comments

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  • Grayscale, Fidelity, and Bitwise’s spot Ethereum ETF applications have a 21-day SEC comment period.
  • Despite Standard Chartered’s optimism and the SEC’s approval of Bitcoin ETFs, analysts are divided on Ethereum ETF prospects.

The proposals for spot Ethereum Exchange-Traded Funds (ETFs) by top fund managers Grayscale, Fidelity, and Bitwise have been opened for public comment by the U.S. Securities and Exchange Commission (SEC). An important turning point in the continued integration of digital assets into the regulated financial landscape has been reached with this judgment.

The Significance of Open Discussion in ETF Approval 

The SEC’s call for comments, which is available for 21 days after it is published in the federal register, is an important stage in the approval process for exchange-traded funds (ETFs) and is similar to the route that spot Bitcoin ETF applications cleared.

In order to assess public opinion and concerns about the proposed financial products, this procedural phase seeks input and comments from American individuals and groups.

The questions of market size and the relationship between ETH futures and spot markets are crucial to the SEC’s assessment.

The notifications explore the important question of whether the size of the spot ETH market is sufficiently large compared to the futures market, a consideration that may have an impact on the SEC’s decision given its prior approval of ETH ETFs based on futures.

NYSE Arca and Cboe BZX, working along with Grayscale and Fidelity, have both presented studies that show the relationship between these markets. They contend that worries about possible fraud and manipulation inside the spot ETH market are lessened by the strength of this correlation and the sizeable size of the market.

Their assessments dispute the SEC’s concerns and maintain that the denial of these ETF applications is not justified by the current regulatory framework, which includes the Investment Company Act of 1940.

What’s interesting is, according to experienced and popular crypto trader, Ash Crypto, this latest development has the potential to be ‘giga bullish’ for ETH.

The Position of Notable Fund Managers

High-profile fund managers’ support for Ethereum ETFs is a sign of the traditional investment industry’s growing interest in cryptocurrency-based financial instruments. Given that the SEC recently approved 11 Bitcoin ETFs in January 2024, which have since seen tremendous inflows and popularity, this move is especially important.

The popularity of these Bitcoin ETFs has increased investor and fund manager confidence, establishing a standard that many hope will be extended to Ethereum-based products.

Notably, Coinbase has publicly endorsed Grayscale’s effort to transform its current Ethereum Trust into a spot ETH ETF, as previously reported by ETHNews.

This project is a calculated step toward incorporating Ethereum more deeply within the framework of regulated financial instruments, as was covered in a recent presentation to the SEC.

Taking a Look at the Future: Ethereum ETFs at a Turning Point

Analysts continue to disagree on the prospects for Ethereum ETFs, despite the favorable momentum around Bitcoin ETFs.

While some, like as Standard Chartered, are optimistic that the SEC will rule in favor of Bitcoin by May 2024, others conjecture that the agency may purposefully hold up permission in order to separate Bitcoin from Ethereum products in terms of timing.

At press time, ETH has recovered 2.01% in the previous 24 hours, reaching $3,367.02. However, this is a more than 5% fall in the last 7 days.

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Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628