SEC Greenlights Spot Ether ETFs in a Major Win for Cryptocurrency

Spot Ether ETFs Receive Unexpected Approval from SEC

In a surprising turn of events, the Securities and Exchange Commission (SEC), which was previously seen as highly politicized, has been compelled to approve eight cryptocurrency ETFs. This time, the approval is for spot Ethereum, following what is believed to be an urgent political intervention from the White House. Despite strong opposition, which led Bloomberg's ETF expert Eric Balchunas to give a spot ETH ETF only a 25% chance of approval, the SEC has granted its first-ever approval of this kind. The approval allows venues run by Cboe, Nasdaq, and the New York Stock Exchange to list products tied to the world's second-largest cryptocurrency, Ethereum. This move eliminates a significant obstacle for spot Ether ETF trading in the US.

Further Approval Needed for Spot Ether ETF Trading

While this approval is a significant step forward, issuers still need a separate sign-off from the regulator. There is currently no set deadline for this decision. As explained by Bloomberg's James Seyffart, today's approval does not mean that Ethereum ETFs will begin trading immediately. The SEC still needs to approve the S-1 documents, a process that could take several weeks.

SEC Chair's Cryptic Stance on Ether as a Security

Prior to the approval, SEC Chair Gary Gensler had been vague about his views on whether Ether is a security, leading to concerns that the agency was adopting a stricter stance. However, it has become clear that the deciding factor in whether something is considered a security is not the opinion of the SEC Chair or other political figures, but rather a phone call from the White House.

Approval a Major Victory for Crypto Industry

Until last week, companies were expecting the SEC to reject the Cboe plan and potentially others by Thursday's deadline. However, the approval is a significant win for the industry, particularly for those who have held onto Ether since January, despite its value plummeting while Bitcoin's soared. The approval is expected to attract a new influx of money to the asset class, appealing to both retail and institutional investors who are interested in cryptocurrency but more comfortable investing in ETFs than tokens.

Increased Interest in Crypto Following FTX Exchange Collapse

Following the collapse of the FTX exchange, many investors are already returning to cryptocurrency. Ether, the native token of the Ethereum blockchain, has seen a more than 60% increase this year alone, thanks to the frenzy. Both Goldman and Bernstein have noted that Ether's potential for growth is likely much greater than that of Bitcoin in the long run.

Optimism Surrounding US Industry Crackdown

Part of Ether's recent rally can be attributed to optimism that the US crackdown on the industry, led by figures such as Elizabeth Warren, is finally easing. Despite opposition from the White House and Gensler, the Republican-led House advanced sweeping cryptocurrency legislation on Wednesday. Although the Senate isn't expected to approve the measure, it also received notable Democratic support in the House.

ETH ETF Issuers Await S1 Approval

Now, ETH ETF issuers are waiting for S1 approval, which will finally allow trading to begin. VanEck, the first to apply for a spot Ether ETF, has already filed an amendment to their S-1 filing.

VanEck's Response to ETF Approval

Following the ETF approval, Matthew Sigel, head of VanEck's digital asset research team, expressed his excitement. He stated that the improved political backdrop would likely lead to further wins for digital asset investors and developers, through new laws and court decisions that attract investment to Bitcoin, Ethereum, and other open-source blockchain software.

Ethereum's Value on the Rise

Despite a brief drop after the close due to assumptions that the SEC wouldn't approve the ETF, Ethereum was last trading just above $3,800. It is rapidly approaching its year-to-date high just above $4,000, and it is expected to increase significantly in the coming months.

Final Thoughts

This approval marks a significant milestone in the world of cryptocurrency, with the SEC's green light for spot Ether ETFs potentially paving the way for further advancements in the field. What are your thoughts on this development? Do you think this will have a significant impact on the future of cryptocurrency? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.