After much hesitation, the US Securities and Exchange Commission has approved applications for Ethereum spot ETFs from prominent asset managers. This marks a significant milestone for the crypto industry.
Just a few days ago, many analysts did not anticipate such a decision, as the SEC had not discussed the applications with the involved parties. Then came the surprise overnight on Friday. All eight applicants received approval from the US Securities and Exchange Commission to enable Ether-linked ETF trading: Grayscale, Bitwise, BlackRock, Fidelity, VanEck, Ark/21Shares, Franklin Templeton, and Invesco Galaxy.
This could pave the way for trading such products later this year. But before trading can begin, providers must still clarify the details with regulatory authorities. An authorized S-1 filing, a comprehensive document containing information about the company's finances and risk profile, as well as the securities it plans to offer, will be necessary for this.
Unexpected Market Reactions
This could be a reason why the price of Ether dropped by almost 6 percent after rising by 20 percent earlier in the week. However, most of the top 100 cryptocurrencies are also currently experiencing price losses.
Big Brother Bitcoin
This is the SEC's second decision on exchange-traded products (ETPs) in the cryptocurrency space. After a long legal battle, the SEC approved Bitcoin ETFs and ETPs in January 2024. According to BTC-ECHO, over $13 billion has flowed into Bitcoin-based ETFs in the last four months.
Will the Ether ETFs be able to mirror Bitcoin ETFs? Investors and market participants will be watching this closely.
