- While the approval of an Ethereum ETF sparks positive sentiment, questions have arisen regarding the S-1 filing.
- Despite the price increase, overall activity on the Ethereum network decreased.
Ethereum [ETH] The approval of an Ethereum ETF has boosted its price significantly, but ETH may face some problems in the future.
Future tasks
According to an analysis by Delphi Digital, the SEC has currently only approved the ETH ETF's 19b-4s listing application, and not the crucial S-1 registration statement.
By way of background, the S-1 is the key document for an ETF, acting like a prospectus and detailing the investment strategy, risks, and financials. SEC approval of the S-1 is mandatory for an ETF to be traded.
Source: X
detail
There are several possible reasons for the SEC's split approval: The proxy approval suggests possible political influence, meaning that the approval may have been influenced by political considerations rather than a careful consideration of the merits of the ETF proposal.
Others believe that 19b-4 approval may be traded off for the passage of ESG rules, which are environmental, social and governance rules.
The SEC may have approved a 19b-4s listing application to gain approval for the ESG rules. To be clear, 19b-4s is a form for rule changes by an exchange (such as listing a new product).
SEC approval allows an exchange to consider listing a new product (e.g., an ETH ETF), but does not directly approve the ETF itself.
It is unlikely that the S-1 will be approved anytime soon, as there is still a lot of uncertainty about the regulation of cryptocurrency ETFs. The SEC may be waiting for further guidance from Congress or for the courts to rule on the matter.
Source: X
While it may still be some time before an Ethereum ETF is fully operational on the open market, cryptocurrency traders have responded very positively to the news.
The price of ETH has risen by 22% in the past and is trading at $3,691.32 at the time of writing. Apart from the hype that is driving Ethereum prices, the overall health of the network will also play a key role in ETH’s long-term trajectory.
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At the time of writing, the number of daily active addresses on the Ethereum network had dropped significantly, and along with it, the number of NFT transactions taking place on the network had also dropped.
The decline in interest in the network could have a significant impact on ETH going forward.
Source: Santiment
