Key Insights
- The SEC has approved applications for spot Ether ETFs from multiple issuers like VanEck, BlackRock, and Fidelity.
- This is a landmark decision allowing mainstream investment in the world’s second-largest cryptocurrency.
- While the ETF rule changes are approved, issuers still need separate SEC clearance on product registrations before trading.
WASHINGTON (MarketsXplora) – The U.S. Securities and Exchange Commission has approved applications for spot ether exchange-traded funds from multiple issuers, in a landmark decision opening the door for wider mainstream investment in the world’s second-biggest cryptocurrency.
In filings dated May 23, the SEC gave the regulatory go-ahead to Ether ETF proposals from the likes of VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton and several other major asset managers.
The approvals mark a milestone for the crypto industry, allowing ether – the native token of the Ethereum blockchain – to be wrapped into exchange-traded products providing easier access for both retail and institutional investors.
While the rule changes enabling Ether ETF listings were approved, the issuers still need separate sign-offs from the SEC on product registration statements before their funds can begin trading, a process that could take weeks or months, analysts said.
The ETF greenlight comes despite the SEC probing whether ether should be classified as a security like a stock, subjecting it to tougher regulation.
Some of the filings showed measures like removing the ability for ether staking – where tokens are locked up to validate transactions – to address potential SEC concerns around proof-of-stake assets.
Thursday’s approvals follow the SEC in January permitting the first spot bitcoin ETF products to trade, cracking open the crypto market to broader investor participation.
“The SEC is making necessary allowances as crypto continues pushing into the mainstream,” said Todd Cipperman, managing principal at Cipperman Compliance Services. “It’s a significant milestone.”
The landmark move by the markets regulator comes a day after U.S. lawmakers voted for legislation aimed at better defining digital asset oversight responsibilities between the SEC and the Commodity Futures Trading Commission.
Crypto investors cheered the Ether ETF approvals, with ether’s price jumping over 4% to $1,930 on the prospect of greater investor flows before paring gains.
“This approval will likely accelerate demand for ether in the U.S. from institutional investors given the ease of its ETF wrapper,” said Jack Liao, CEO of crypto analytics firm Akropolis IO.
The SEC did not immediately approve a spot Ether ETF filing from asset manager Hashdex, with a final deadline for that product decision set for May 30.