The U.S. Securities and Exchange Commission (SEC) has made a landmark decision approving the possible launch of eight exchange-traded funds (ETFs) linked to Ether, the world’s second-largest cryptocurrency. This move follows the SEC’s early approval of a Bitcoin ETF, marking a major shift in the regulatory landscape for digital assets.
The approval of the Ether ETF marks a notable departure from the SEC’s historical stance on the cryptocurrency industry. Legal victories, such as Grayscale’s successful challenge of the SEC’s ruling, have been pivotal in prompting the agency to reconsider its approach to detecting ETF applications.
A significant rule change allowed SEC approval and allows ETFs to invest directly in ether, Ethereum’s native cryptocurrency. Major financial institutions including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy and Franklin Templeton have received regulatory approval. However, additional approvals are required for these products to officially hit the market.
The SEC’s decision follows months of anticipation, with the regulator unexpectedly providing feedback on the pending applications earlier this week. This rapid action is likely to come as the deadline for responses to Ether ETF applications approaches.
The anticipation surrounding this approval has led to a surge in the price of Ethereum, soaring more than 20% since Monday and more than 60% since the beginning of the year. This surge highlights investor confidence in the mainstream acceptance of cryptocurrencies.
According to CoinMarketCap data cited by Yahoo Finance, Ether’s market capitalization currently exceeds $450 billion, accounting for approximately 18% of the total cryptocurrency market value.
Industry experts hailed the SEC’s approval of the spot Ether ETF as a watershed moment for cryptocurrency adoption in capital markets. Chainlink co-founder Sergey Nazarov emphasized the importance of Ethereum ETF approval in driving mainstream adoption. Sumit Gupta, co-founder of CoinDCX, described the SEC’s decision as a mature regulatory environment conducive to mainstream adoption.
The SEC’s approval lays the groundwork for the potential inclusion of Ethereum in investment portfolios, including retirement accounts and pension plans. Moreover, this development is expected to boost the price of Bitcoin, which has already been gaining popularity since receiving approval earlier this year.
In Washington, a bill has passed the U.S. House of Representatives to reduce the SEC’s influence on cryptocurrency regulation and establish the Commodity Futures Trading Commission (CFTC) as the primary regulator for cryptocurrencies. This legislative initiative reflects evolving attitudes toward cryptocurrency regulation and highlights the dynamic nature of the regulatory environment.
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