The cryptocurrency world was taken by surprise when the U.S. Securities and Exchange Commission (SEC) gave the green light to eight spot Ethereum exchange-traded funds (ETFs). This unexpected approval comes after the regulator appeared hesitant to allow such products earlier.
Major asset managers like BlackRock, Fidelity, Grayscale, and others received approval for their proposed Ethereum ETFs. However, they still need to get their registration statements authorized before these funds can start trading.
Analysts suggest this final step could take several weeks or even months to complete, as the SEC begins reviewing the issuers’ documentation. The timeline remains uncertain, contributing to the element of surprise surrounding these approvals.
The SEC’s apparent change of stance was likely influenced by growing calls for regulatory consistency. Lawmakers had urged the commission to approve Ethereum ETFs, citing its recent approval of spot Bitcoin ETFs as a precedent.
As anticipation for the Ethereum ETF approvals built up, the discount on the Grayscale Ethereum Trust narrowed significantly. Once converted to an ETF, this will allow holders to redeem their shares for the underlying ether’s cash value.
While seen as a positive development, some experts caution that Ethereum ETFs may not match the immense success of their Bitcoin counterparts. Estimates suggest they could initially attract 10-15% of the assets flowing into Bitcoin ETFs.
Nonetheless, this regulatory breakthrough paves the way for broader mainstream investment and adoption of Ethereum, the second-largest cryptocurrency by market capitalization after Bitcoin.
