Bitcoin (BTC), the second-largest cryptocurrency by market value, has gained 17% because more people are hopeful that the U.S. Securities and Exchange Commission (SEC) will accept its exchange-traded fund (ETF).
On May 20, Ethereum’s value went up greatly. Many people buy and sell $3,658 worth of it every 24 hours. An expert at Bloomberg named Eric Balchunas raised the odds that the Ethereum ETF would be accepted from 25% to 75%, which caused the price to go up.
Balchunas said that the SEC may have accelerated the review process because of increased political pressure. He said the regulator’s earlier stance showed little interest in ETF applicants.
“The SEC appears to be pushing exchanges like NYSE and Nasdaq to revise their filings, though no formal confirmation has been issued,” Balchunas said.
Ethereum ETF Decision Registrations Still Pending
At the same time, Nate Geraci, head of the ETF Store and co-founder of the ETF Institute, said that the final decision on whether individual funds (S-1) must be registered is still not out. Geraci says that the SEC could accept changes to exchange rules (19b-4s) without also approving the fund’s registration (S-1), which could mean that VanEck’s deadline for requesting an Ethereum spot ETF on May 23 is not met.
Because Proof-of-Stake (PoS) cryptocurrencies are complicated and risky, this delay would give the SEC more time to review and accept these filings. The SEC has already started looking into whether Ethereum’s main native asset, ether, is still a security after the network switched from a Proof-of-Work (PoW) decision mechanism to a Proof-of-Stake (PoS) mechanism.
Spot ether ETF applications could be turned down if the SEC decides that ether is an investment. Researchers at QCP Capital believe that approving a spot Ethereum ETF and the fact that the market isn’t very interested could cause a short squeeze. The last time ETH traded at that price was March 12, when it hit an all-time high of $4,066. This event could push it back to that price.
People who deal in cryptocurrencies are very interested in what the SEC does next. The recent rise of Ethereum shows how important changes in rules can be for the prices of digital assets. If an Ethereum ETF is accepted, it could lead to more institutional investment and wider market acceptance, strengthening Ethereum’s role in the financial ecosystem even further.
