The US SEC has approved exchange applications to list spot Ether ETFs.
Nine issuers, including prominent firms such as VanEck, ARK Investments/21Shares, and BlackRock, are gearing up to launch ETFs linked to Ether, the second-largest cryptocurrency by market capitalization. These companies hope to capitalize on the growing interest in digital assets by offering investors more ways to gain exposure to Ethereum through regulated financial products. The approval from the US SEC marks a significant milestone for the crypto industry, potentially paving the way for increased institutional investment and broader acceptance of cryptocurrencies in traditional financial markets.
The U.S. Securities and Exchange Commission (SEC) approved applications on Thursday from Nasdaq, CBOE, and NYSE to list exchange-traded funds (ETFs) tied to the price of ether. This move potentially sets the stage for these products to start trading later this year.
While the ETF issuers still need final approval before launching, Thursday’s decision is a significant and unexpected win for both the firms and the cryptocurrency industry, which had anticipated the SEC rejecting the filings as recently as Monday.
Nine issuers, including VanEck, ARK Investments/21Shares, and BlackRock, aim to launch ETFs linked to ether, the second-largest cryptocurrency. This follows the SEC’s January approval of bitcoin ETFs, marking a pivotal moment for the industry.
Rob Marrocco, the global head of ETP listings at Cboe Global Markets, stated, “The introduction of spot bitcoin ETFs has already demonstrated significant benefits for the digital assets and ETF space, and we believe that spot ether ETFs will similarly provide safeguards for U.S. investors.”
Nasdaq and NYSE chose not to provide any comments.
When questioned about the ether ETFs by reporters during an industry event earlier on Thursday, SEC Chair Gary Gensler, known for his skepticism towards cryptocurrencies, refrained from commenting. An SEC spokesperson mentioned in an email announcing the approval that the agency would not offer any further comments.
The exchange applications requested SEC approval for a rule change necessary to list new products, but the issuers must still obtain SEC approval for ETF registration statements outlining investor disclosures before trading can commence.
In contrast to the exchange filings, there is no specific timeframe within which the SEC must decide on these statements. Industry insiders stated that it remains uncertain how long this process will take. According to two sources familiar with the matter, while many issuers are prepared to launch, the SEC’s corporate finance division is expected to request modifications and updates in the coming days and weeks.
For over a decade, the SEC denied approval for spot bitcoin ETFs due to concerns about market manipulation. However, they were compelled to authorize them following a court challenge won by Grayscale Investments last year.
Sui Chung, CEO of CF Benchmarks, the index-provider for several bitcoin and ether ETFs, explained that ether presents greater complexity than bitcoin, implying that the SEC may take months to review the statements. However, with established templates from bitcoin ETFs, Chung believes the SEC’s ability to delay is limited.
Various investors, including hedge funds, wealth advisors, and retail investors, have collectively invested over $30 billion in crypto ETFs.
Thursday’s decision provides further momentum for the cryptocurrency industry’s push into mainstream finance. This week, the UK regulator also approved listed cryptocurrency products, and the U.S. House of Representatives passed a landmark bill aimed at providing regulatory clarity for cryptocurrencies.
Although the bill must still pass the Senate, its broad bipartisan support represents a significant endorsement for the industry.
