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The cryptocurrency ecosystem is in an uproar following the shock announcement of the SEC's approval of an Ethereum ETF. The decision, which could redefine institutional investors' access to digital assets, comes at a critical time for the market. While Bitcoin already led the way with its own ETF earlier this year, Ethereum, the second-largest cryptocurrency by market cap, is set to gain unprecedented exposure in traditional financial markets.
Historic Approval of Ethereum ETF
Last night, the US Securities and Exchange Commission (SEC) took the decisive step of approving multiple applications for Ethereum ETFs, marking a major step forward for the second-largest cryptocurrency. Among the companies that received SEC approval are financial giants such as BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Ark/21Shares, and Invesco/Galaxy. The approval concerns the 19b-4 form, which is essential for the creation of these funds, but there remains the crucial step of getting the S-1 form approved, which is required before the ETFs can be sold.
Bloomberg analyst James Seifert highlighted the unexpected nature of the decision:A week ago, I would have said it was a bit crazy to think these ETFs would get SEC approval.The comments highlight the rapid and unpredictable nature of the SEC’s position, which until recently had been reluctant to engage with Ethereum ETF issuers.
Grayscale, one of the companies to benefit from the recognition, expressed its satisfaction through a spokesperson.Grayscale appreciates the opportunity to work constructively with regulators as they review an Ethereum ETF and remains optimistic about the potential for incorporating Ethereum into the U.S. regulatory framework through an ETF.. “
Towards a new investment paradigm
The 19b-4 approval indicates regulators are willing to allow the Ethereum ETF to be commercialized, but it does not guarantee final approval of the S-1. According to James Seifert:It will likely take some time for the S-1 to be approved and for these ETFs to start trading. My guess is at least a week, but probably longer. If history is any guide, it could take longer, even months.The statement reflects the fact that the exact timing of the launch of these new financial products remains unclear.
In any case, the SEC's approval of an Ethereum ETF is not only an important step for issuers of these products, but could have a significant impact on the cryptocurrency market as a whole. The decision follows the successful launch of a Bitcoin ETF in January, which quickly attracted $13.3 billion in net inflows, setting a performance record for an ETF at the time of its launch. The arrival of an Ethereum ETF could be similarly successful, sparking new inflows into the second-largest cryptocurrency.
The SEC's policy shift comes amid a growing pro-crypto movement within the U.S. Congress, with several recent votes indicating growing support for crypto-friendly legislation. For example, last week the Senate passed a resolution to repeal Staff Accounting Bulletin 121, which would have encouraged regulated banks to offer crypto custody services. Additionally, the House of Representatives approved the 21st Century Financial Innovation and Technology Act (FIT21), which is expected to bring much-needed legal clarity to cryptocurrencies.
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He holds a degree from Sciences Po Toulouse and is a Blockchain Certified Consultant by Alyra. In 2019, he returned to the Cointribune venture, working to expand the potential of blockchain to multiple sectors of the economy and to educate and inform the public about the constantly evolving ecosystem. My objective is to gain a deeper understanding of blockchain and seize the opportunities it offers. I am committed to providing an objective analysis of the current situation, elucidating market trends, communicating the latest technological innovations and gauging the prospects of economic and social challenges in this revolution of the market.
Disclaimer
The views, thoughts and opinions expressed in this article are those of the author and should not be taken as investment advice. Please conduct your own research before making any investment decisions.
