- The SEC has approved the launch of spot Ethereum ETFs, allowing mainstream investors to trade the second-largest cryptocurrency.
- This milestone is expected to boost interest and investment in Ethereum, despite a cautious outlook on initial inflows and returns.
In a landmark development, the U.S. Securities and Exchange Commission (SEC) has approved the commencement of trading for spot Ethereum (CRYPTO: ETH) exchange-traded funds (ETFs). This move is set to expose mainstream investors to the price fluctuations of the world’s second-largest cryptocurrency. Among the approved firms are heavyweights like 21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, VanEck, and Invesco Galaxy.
However, Grayscale’s Trust and Mini Trust remain the only funds without effective documents from the SEC, though analysts expect their approval soon.
A New Era for Ethereum ETFs
It’s official: Spot Ethereum ETFs have been greenlit by the SEC, with 424(b) forms now rolling in. The final step has been completed, setting the stage for the launch at 9:30 AM tomorrow. This approval marks a significant milestone for the cryptocurrency market.
Coinbase Global Inc. (NASDAQ: COIN), the custodian for eight of the nine newly approved ETFs, described the clearance as a pivotal moment for cryptocurrencies. The websites of these new investment products, including BlackRock’s iShares Ethereum Trust, have also gone live, signifying the start of a new trading era for cryptocurrency-based funds.
Why It Matters
The SEC’s approval came somewhat unexpectedly, given the initial lack of engagement between the SEC and issuers. While firms had received approval of 19b-4 forms in May, they needed their registration statements to go effective before launching.
Citi projected up to $5.4 billion in inflows within the first six months of the anticipated launch of spot Ethereum ETFs in the U.S. However, the bank cautioned that actual inflows and returns might be lower than projected. Analysts, led by Alex Saunders, noted that Ethereum offers long-term diversification benefits due to its varied use cases, benefits that are not currently reflected in the market.
Michaël van de Poppe, a widely-followed cryptocurrency analyst, anticipated a surge in activity and the value of tokens within the Ethereum ecosystem following the approval. This could lead to increased interest and investment in Ethereum and related projects.
Market Reaction
At the time of writing, Ethereum was trading at $3,470.06, down 1.42% in the last 24 hours, according to Benzinga Pro. Shares of Coinbase closed 2.86% higher at $265.15 during Monday’s regular trading session.
The approval of these Ethereum ETFs signifies a major step forward in the mainstream adoption of cryptocurrency. It not only provides investors with new opportunities but also strengthens the position of Ethereum as a leading asset in the digital economy. With the launch imminent, the cryptocurrency market is poised for a significant transformation.
