US SEC approves application of Ether ETF to cryptocurrency milestones
In a surprising development on Thursday, the U.S. Securities and Exchange Commission (SEC) approved applications for listing of an exchange-traded fund (ETF) linked to the price of Ethereum on major exchanges including Nasdaq, CBOE and NYSE. These developments mark a significant shift toward mainstream acceptance of cryptocurrency investing.
This decision allows these exchanges to begin trading Ether ETFs later this year, pending further approval. The announcement comes one day after the U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act. The bipartisan bill, currently under scrutiny in the Senate, aims to create a new legal framework for digital currencies.
Despite the optimism surrounding approval, the product cannot be launched until the issuer receives SEC consent in the ETF’s registration statement detailing investor disclosures. There is no specific timeline for these decisions, which adds uncertainty to the process.
Thursday’s approval caught many industry experts by surprise. Especially since the SEC has historically been reluctant to approve similar cryptocurrency-based products. The SEC has previously expressed concerns about market manipulation, which has hindered the approval of spot Bitcoin ETFs for over a decade. However, Grayscale Investments’ court victory last year that forced the SEC to approve a Bitcoin ETF appears to have set a legal precedent that paved the way for the Ether ETF.
Critics of the new law, including SEC Chairman Gary Gensler, have expressed concerns about potential risks to investors and broader financial markets. Gensler’s warning highlights the ongoing debate surrounding the regulation and safety of digital currency investments.
Prominent issuers such as VanEck, ARK Investments/21Shares and BlackRock are among the nine hoping to launch an Ether ETF. Their optimism was boosted by an unexpected request from the SEC on Monday for exchanges to quickly improve their filings. This represents a more proactive approach from regulators than previously expected.
As the cryptocurrency industry continues to evolve, the SEC’s approval of the Ether ETF is not only a landmark for digital currency investing, but also signals a possible change in regulatory attitudes toward more complex crypto assets. As stakeholders closely monitor developments in digital finance, the implications of these developments are likely to reverberate throughout financial markets.
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