Ethereum’s price movement has not been substantially stirred by the US Securities and Exchange Commission’s (SEC) recent approval of spot Ether exchange-traded funds (ETFs) for rapid introduction in the United States.
Though the Exchange approval marks a major turning point, Ethereum’s price has seen no change. Before the SEC’s ruling, Ether had a minor drop of 3.4%, then somewhat recovered with about 5%. CoinMarketCap reports that Ether is trading at $3,701 with a 24-hour trading volume of $47.5 billion.
SEC Approval Clears the Way for Major Financial Firms
Approved by the SEC on May 23, 19b-4 applications from big financial firms like VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise passed. This important phase lets these companies launch and trade Ether ETFs on several platforms. Nevertheless, only one ETF issuer—Hashdex—did not get regulatory clearance on the day.
Although the approval marks a major advancement, ETF issuers must get SEC clearance for their S-1 registration statements before spot Ether ETFs may formally start trading.
The Exchange surprising decision to speed up 19b-4 submissions on May 20 and the elimination of staking from various applications have generated rumors about the reasons for the regulatory body’s quick response. Some experts believe that political pressure played a part since bipartisan legislators supported ETF approval based on the precedent created by Bitcoin ETFs.
Industry analysts view Ethereum ETF certification as a subdued acknowledgment by the Exchange that Ether is not regarded as a security. Bloomberg ETF analyst James Seyffart reiterated this issue, noting that approving these commodities-based trust shares means the Exchange won’t pursue Ether as a security.
Opinions vary on whether this approval settles the argument on Ether’s security posture exactly. While some, like digital asset attorney Justin Browder, feel S-1 clearance would unequivocally prove Ether as not a security, others, like Verbitskii, argue the SEC’s position is still unknown.
An official statement from the Exchange and some of its Commissioners, which would provide more clarification on the subject, should be issued soon.
The approval of spot Ether ETFs follows the SEC’s approval of multiple spot Bitcoin ETF applications on January 10, marking an industry turning point. Industry analysts see further expansion ahead, and some even project notable Ether price swings. CoinDCX co-founder Sumit Gupta pointed out Bitcoin’s price explosion following the launch of its ETF in January and hinted at comparable possibilities for Ether.
Lennix Lai, OKX’s chief commercial officer, stressed the possible institutional demand for spot Ethereum ETFs, emphasizing Ethereum’s value in DeFi products and its Proof-of-Stake (PoS) architecture.
Despite these hopeful projections, some analysts warn against anticipating an instant rise in Ether prices. Co-founder of Blocklogica Asal Alizade clarified that the key change in the market was the acceptance of Bitcoin ETFs, implying that Ether’s ETF approval might not have an immediate significant influence on pricing.
Benjamin Charbit, CEO of Darewise Entertainment, said that the ETF approval might have already been considered, suggesting a degree of maturity akin to conventional finance.
The full consequences of the Exchange approval of spot Ether ETFs remain to be seen while the crypto market absorbs this news.
