SEC’s Sudden Policy Shift Approves Ethereum (ETH) ETFs, Marking a New Era for Crypto Investments

• In a stunning reversal, the U.S. Securities and Exchange Commission (SEC) announced on Thursday that it has approved eight applications for spot Ethereum ETFs, effectively green-lighting Ethereum trading on Wall Street.
• The following funds were approved in the filing: the converted Grayscale Ethereum Trust, the Bitwise Ethereum ETF, iShares Ethereum Trust, VanEck Ethereum Trust, ARK/21 Shares Ethereum ETF, Invesco Galaxy Ethereum ETF, Fidelity Ethereum Fund, and Franklin Ethereum ETF.
• Bloomberg ETF expert James Seyffart suggested in a tweet that it could be a “couple weeks” before the fund managers’ S-1 documents are approved to enable trading.

Discover the latest developments as the SEC approves eight spot Ethereum ETFs, signaling a major shift in crypto trading on Wall Street.

SEC Approves Spot Ethereum ETFs

In a landmark decision, the U.S. Securities and Exchange Commission (SEC) has approved eight applications for spot Ethereum ETFs. This move marks a significant milestone for Ethereum, as it paves the way for its trading on Wall Street. The approved funds include the Grayscale Ethereum Trust, Bitwise Ethereum ETF, iShares Ethereum Trust, VanEck Ethereum Trust, ARK/21 Shares Ethereum ETF, Invesco Galaxy Ethereum ETF, Fidelity Ethereum Fund, and Franklin Ethereum ETF.

Timeline for Trading

While the approval is a major step forward, trading will not commence immediately. Bloomberg ETF expert James Seyffart has indicated that it could take a “couple weeks” for the fund managers’ S-1 documents to be approved, enabling trading to begin. Historically, this process can take several months, but there is speculation that it might be somewhat accelerated in this case.

Implications for Ethereum and the Crypto Market

Just a week ago, many financial experts and crypto industry leaders had deemed the approval of spot Ethereum ETFs increasingly unlikely. The SEC had shown little indication of moving forward with any spot ETH ETF applications before the looming May 23 deadline. Additionally, a lawsuit filed by Ethereum software company Consensys against the SEC had alleged that the regulator had secretly considered ETH to be an illegal, unregistered security for over a year. If the SEC had formally labeled ETH a security, the approval process for Ethereum ETFs would have been different.

By approving spot ETH ETFs, the SEC has implicitly acknowledged that ETH is not a security in itself. This is a significant victory for crypto advocates, given Ethereum’s crucial role in underpinning many of the industry’s most prominent projects and services. However, to get over the finish line, several ETH ETF issuers dropped language from their applications regarding the staking of customer ETH. The SEC has long viewed staking services offered by financial intermediaries as illegally unregistered securities schemes.

Conclusion

The approval of spot Ethereum ETFs by the SEC is a historic moment for the crypto market. It not only legitimizes Ethereum as a financial asset but also opens the door for traditional financial institutions and investors to gain exposure to ETH without holding any crypto themselves. This development follows the SEC’s approval of eleven spot Bitcoin ETF applications in January, which have since attracted nearly $13 billion in net inflows. As Cody Carbone, chief policy officer at the crypto lobbying group Digital Chamber of Commerce, aptly put it, “This is ETH’s IPO. That is a massive stamp of approval.” The future looks promising for Ethereum and the broader crypto market as they continue to gain acceptance and integration into traditional financial systems.