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US SEC Approves Exchange Applications to List Spot ETFs on Ethereum; the token drops by 5%
The U.S. Securities and Exchange Commission (SEC) on Thursday approved requests from Nasdaq, CBOE and NYSE to list exchange-traded funds (ETFs) tied to the price of Ethereum (ether), potentially paving the way for crypto products to begin trading. be exchanged later this year.
Although ETF issuers must get the green light before the products can launch, the latest approval is a major surprise win for those firms and the cryptocurrency industry, which expected the SEC to reject the filings . Prior to that, Bitcoin ETFs had already been approved in January this year, sparking renewed interest in the cryptocurrency sector.
Nine issuers, including VanEck, ARK Investments/21Shares and BlackRock, are likely to launch ETFs tied to the second-largest cryptocurrency, Ethereum, after the SEC in January approved bitcoin ETFs in a watershed moment for the industry. Market participants see this as a significant step towards commodity trading.
The US SEC’s approval of Ethereum spot ETFs, following Bitcoin spot ETFs, marks a significant advance in the cryptocurrency market, improving investor access and liquidity. Institutional investors can now gain a regulated route to exposure, encouraging broader market participation. This milestone indicates growing regulatory acceptance of cryptocurrencies, said Edul Patel, CEO of Mudrex.
“After Hong Kong and the United States, many other countries are likely to follow suit in approving Bitcoin and Ethereum spot ETFs. Such approvals can boost investor confidence, spur market growth and encourage further innovation in the sector, ultimately leading to a more robust and mature global financial landscape,” he said.
Thursday’s move was nothing less than a surprise as it was the deadline for the SEC to decide on VanEck’s request. Market participants were bracing for rejection as the SEC had not engaged with them on the requests.
Exchange filings had sought SEC approval for a rule change needed to list new products, but issuers still need the SEC to approve ETF registration statements detailing the information provided to investors before they can begin to trade.
The US Securities and Exchange Commission’s (SEC) green light for spot Ether ETFs is a big moment for the cryptocurrency industry. It builds on the success of Bitcoin ETFs, offering investors a safe and regulated way to access Ether. This broader acceptance will fuel mainstream adoption and reflects a maturing regulatory environment, said Sumit Gupta, co-founder of CoinDCX.
“The classification of Ethereum as a security could have significant consequences for the Web3 industry. Ethereum is the foundation for a vast ecosystem of decentralized applications (dApps) and Web3 projects. A spot ETF on Ether (ETH) is expected to lead a rally in the asset class to new highs,” he said.
However, despite the positive news, Ethereum fell around 5% in the last 24 hours to $3,655 at 1.30pm IST. Etheruem’s total market capitalization stood at just over $440 billion, while the total market capitalization of all crypto assets stood at $2.5 trillion over the same period.