Fourth of July Surprise: Could the SEC Approve the Ethereum Spot ETF?
Ethereum Spot ETFs: A Highly Anticipated Launch
The United States Securities and Exchange Commission (SEC) might approve Ethereum spot ETFs by next week, on July 4, 2024, according to a Reuters report. This eagerly awaited decision by the crypto sector could signify a new milestone in the institutionalization of cryptocurrencies. Eight asset managers have submitted applications to the SEC seeking approval for their Ethereum spot ETFs. Among them are several major crypto investment firms such as BlackRock, VanEck, Franklin Templeton, and Grayscale Investments.
Most of these firms had already launched Bitcoin spot ETFs last January after years of challenges with U.S. regulators.
Grayscale, which manages the largest Ethereum fund currently, hopes to convert its existing Ethereum trust, ETHE, into an Ethereum spot ETF. The investment firm had previously undertaken this maneuver with Bitcoin (BTC) by converting its Bitcoin Trust, GBTC, into a Bitcoin spot ETF.
According to our information, discussions between asset managers and regulators are in their final stages. The remaining modifications to the documents are reportedly only “minor.” An attorney working with one of the issuers stated that “it’s just a matter of time” and that the Ethereum spot ETFs are “likely just a week or two away from approval.”
A Green Light for Institutional Adoption?
While the approval of Bitcoin spot ETFs was a resounding success, attracting over $8 billion within a few weeks, some analysts are more cautious about investor enthusiasm for Ethereum spot ETFs.
“Ethereum doesn’t have the same market capitalization as Bitcoin, and its transaction volumes are also lower,” said James Butterfill, Head of Research at Coinshares. “Therefore, inflows could be much lower at the launch of Ethereum spot ETFs.”
In June, the price of Ether (ETH) has slightly declined, with a 10% drop, compared to an 8.3% decrease for Bitcoin. Most of the time, Bitcoin’s fluctuations significantly impact Ether’s price. The SEC’s approval of Ethereum spot ETFs would mark a new stage in the adoption of cryptocurrencies by institutional investors. Indeed, the ease of investment offered by ETFs could attract a broader audience to Ether, thereby contributing to its growth and democratization among the general public.
The future will reveal whether the enthusiasm for Ethereum spot ETFs will match that of Bitcoin spot ETFs, but one thing is certain: the imminent approval of these products by the SEC is a sign of the evolving financial landscape in the United States and growing interest in cryptocurrencies.