Markets
Ether Rises as Market Turns Optimistic on Ether ETF Approval
Key Takeaways
- The price of ether rose more than 20% on Tuesday before giving back some of the gains.
- The price jump appears to be related to improving odds for a spot ether exchange-traded fund (ETF).
- Crypto markets experienced renewed optimism for spot ether ETF approval after the SEC asked exchanges to update related filings.
The price of ether (ETH), which is the native cryptocurrency of Ethereum network, rose as much as 20% on Tuesday before giving up some of the gains amid renewed hope of spot ether approval exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC).
What’s behind this renewed optimism?
After the success of bitcoin (Bitcoin) cash exchange-traded funds that began trading in Januarycryptocurrency markets wanted a similar story for ether ETFs, only to see their hopes dashed when the u.s. regulator raised concerns about Ether’s status as a security and reviewed its previous apprehensions about staking.
But now it appears the SEC is moving forward with the application process.
The SEC recently requested that several exchanges update 19b-4 filings related to spot ether ETFs on an expedited basis. CoinDesk reported. This step was also performed during the Bitcoin ETF application approval process.
Another important development was Fidelity changing your ETF Ether app to remove staking rewards.
Ether holders can stake or lock your tokens participate in the transaction validation process on the Ethereum network and can earn rewards for doing so.
The SEC has issues with staking as it considers it an offering of securities and has sued cryptocurrency exchanges such as Binance, Coin baseIt is Kraken, in the past for offering it as a service. Fidelity’s removal of staking from its application is seen as a move to put the regulator at ease with the Ether ETF product.
And this fueled optimism among investors and analysts.
On Monday, Bloomberg analyst Eric Balchunas announced an increase in the odds of approval of his firm’s 19b-4 filings to 75%, previously set at 25%. On the Polymarket prediction market, the odds of approval for a spot ether ETF rose to around 60% on Tuesday, from 10% the day before.
When will there be a final decision on Ether ETFs?
Short answer: maybe not anytime soon.
According to Bloomberg analyst James Seyffart, the SEC has a deadline of Thursday to rule on VanEck’s 19b-4 filing. After that, it would still take weeks or months to Initial S-1 Registration filings to be approved and the first spot ether ETF to hit the market.
But some progress is better than none for those awaiting the first ether ETF. And for some, the fine print is key.
The removal of staking from the app was expected, according to Scott Johnsson, general partner at Van Buren Capital, but the “biggest signal is that there are no changes to the structure and disclosures of the commodity grantor trust. All signs point to for the SEC to present its arguments to ETH as security,” he posted on X on Tuesday.