In a landmark decision, the US Securities and Exchange Commission (SEC) has signalled its approval for the potential launch of eight exchange-traded funds (ETFs) linked to ether, the world’s second-largest cryptocurrency. This move follows the SEC’s approval of the first bitcoin ETFs earlier this year, marking a significant shift in the regulatory landscape for digital assets.
The SEC’s approval on Thursday involved crucial rule changes that pave the way for ETFs that directly invest in ether, the native cryptocurrency of the Ethereum blockchain. Applications from prominent financial groups such as BlackRock, Fidelity, Invesco, and Ark Invest received the green light. While this represents a major step forward, a second round of approvals will be necessary before these products can officially launch.
The anticipation surrounding these approvals has fueled a surge in ether’s price, which has climbed more than 20% since Monday and over 60% since the beginning of the year. This reflects the growing confidence among investors regarding the mainstream acceptance of cryptocurrencies.
The SEC’s decision comes after months of silence on the matter. On Monday, the regulator unexpectedly provided feedback on pending applications to issuers and exchanges, triggering a flurry of paperwork revisions and submissions. This swift action was likely prompted by approaching deadlines for responses to ether ETF applications from VanEck and Ark Invest.
While the SEC’s Thursday approval marks a significant milestone, the timing of the second round of approvals and the subsequent launch of ether ETFs remains unclear.
Commenting on the development, Sergey Nazarov, co-founder of Chainlink stated: “The Ethereum ETF approval is a second large step forward for the crypto industry… The attention and adoption around the Ethereum ETF also proves the long-term thesis we have been building around, that the capital markets will be the next large source of adoption for the cryptocurrency industry, essentially being the key force that is driving it to new heights.”
Nazarov highlighted the potential of the approval to shine a spotlight on Ethereum’s smart contract and decentralised application capabilities, which are attracting growing interest from major financial institutions.
Sumit Gupta, Co-founder of CoinDCX commented, “The US Securities and Exchange Commission (SEC)’s green light for spot Ether ETFs is a watershed moment for the crypto industry. It builds on the success of Bitcoin ETFs, offering a secure and regulated way for investors to access Ether. This broader acceptance will fuel mainstream adoption and reflect a maturing regulatory environment, paving the way for further legitimising the entire digital asset space.”
“Ethereum plays a pivotal role in the decentralised ecosystem, and this regulatory progress will be instrumental in shaping the future of Web3 and the ongoing digital revolution. The SEC decision is particularly important, as earlier media reports suggested the SEC was investigating the Ethereum Foundation, coupled with the ongoing debate about Ethereum’s native token, ether (ETH), and its potential classification as a security,” Gupta added.
Meanwhile, Himanshu Maradiya, Founder & Chairman of CIFDAQ Blockchain Ecosystem India Ltd said, “The SEC’s approval of Ethereum ETFs marks a watershed moment in digital finance, poised to catalyse a sustained bull run while tempering volatility to align with traditional asset classes. This monumental achievement not only validates the mainstream acceptance of cryptocurrencies but also sets the stage for widespread institutional and retail involvement. Regulated investment vehicles for Ethereum will bolster investor confidence and ignite further innovation within the blockchain sphere.”
Maradiya added, “In the Indian market, this development heralds a new era of global digital asset integration, offering invaluable insights for our regulators. Indian investors stand to benefit from expanded portfolio diversification and enhanced access to global crypto markets. This pivotal juncture has the potential to accelerate cryptocurrency adoption in India, fostering a more inclusive and dynamic financial ecosystem. Moreover, it presents retail investors with a unique opportunity to harness the power of this asset class for wealth creation.”
This landmark decision by the SEC could potentially usher in a new era for cryptocurrencies, further solidifying their integration into traditional financial markets.
