SEC greenlights spot Ether ETFs, but Ether price shows little movement

Ethereum’s
price
has
barely
budged
despite
the
US
Securities
and
Exchange
Commission
(SEC) giving
the
green
light
for spot
Ether
exchange-traded
funds
(ETFs)
to
launch
faster
in
the
United
States.

Ahead
of the
SEC’s
landmark
approval,
Ether
fell
by
3.4%,
rebounding
by
around
5%
shortly
after. As
of
now,
Ether
is
trading
at
$3,701,
with
a
24-hour
trading
volume
of
$47.5
billion,
according
to
CoinMarketCap.

On
May
23,
the
SEC approved 19b-4
applications
from
financial
giants
such
as
VanEck,
BlackRock,
Fidelity,
Grayscale,
Franklin
Templeton,
ARK
21Shares,
Invesco
Galaxy,
and
Bitwise.
This
crucial
approval
allows
these
firms
to
list
and
trade
spot
Ether
ETFs
on
their
respective
exchanges.

Hashdex
was
the
only
ETF
issuer
that
did
not
receive
regulatory
approval
on
the
day.

However,
the
journey isn’t
over for
ETF
issuers. They
must
still
secure
the
SEC’s
approval
for
their
S-1
registration
statements
before
spot
Ether
ETFs
can
officially
begin
trading,
which
might
take
weeks
or
months.

“Typically,
the
SEC
takes
several
weeks
to
a
few
months
to
review
and
provide
feedback
on
S-1
registrations.
This
period
involves
a
detailed
examination
of
the
filings
to
ensure
compliance
with
regulatory
requirements.
So,
in
worst
case,
we
are
looking
to
end
of
summer,”
Georgii
Verbitskii,
founder
of
TYMIO,
told
crypto.news.

Meanwhile,
the
securities
regulator’s
directive
on
May
20
to
accelerate
19b-4
filings
took
many
by
surprise,
especially
with
the
notable
removal
of
staking
from
several
applications.
This
unexpected
move
has
spurred
speculation
about
the
motivations
behind
the
SEC’s
swift
action.

Some
industry
insiders
suggest
that
political
pressure
played
a
role. Prior
to the
approval,
a
bipartisan
group
of
lawmakers
had

urged
the
SEC
to
approve
these
ETFs,
arguing
that
the
precedent
set
by
Bitcoin
ETFs
should
extend
to
Ethereum.

Does
SEC’s
ETF
nod
mean
ETH
is
no
longer
a
security?

Meanwhile,
the
approval
of
Ethereum
ETFs is
seen
by
industry
experts as
a
subtle
but
significant
nod from
the
SEC, implying
that
Ether
is
not

considered
a
security.

“These
are
commodities-based
trust
shares,
so
the
SEC,
by
approving
these,
is
explicitly
saying
they’re
not
going
to
go
after
Ether
as
a
security,”

said
Bloomberg
ETF
analyst
James
Seyffart
on
the
Bankless
podcast.

Digital
asset
lawyer
Justin
Browder concurs,

asserting that
if
Ether
ETFs
get
S-1
approval—the
final
hurdle
for
trading—then
the
“debate
is
over:
ETH
is
not
a
security.”

Nonetheless,
other
market
players
like
Verbitskii
believe
the
SEC
might
still
target
ETH.

“The
approval
of
an
Ethereum
ETF
by
the
SEC
does
not
mean
they
no
longer
see
Ethereum
as
a
security.
It
simply
means
the
ETF
meets
regulatory
standards
for
trading
and
investor
protection
(or
at
least
they
think
so),”
Verbitskii
said.

Finance
lawyer
Scott
Johnsson
also
pointed
out
that
the
SEC
did
not
confirm
Ether’s
non-security
status
in
its
approval
order,
stating
that
it
“completely
sidestepped”
the
issue.

An
official
statement
from
the
SEC
and
some
of
its
Commissioners is
anticipated in
the
near
future,
which
may
provide
further
clarity
on
this
matter.

The
approval
of
spot
Ether
ETFs
comes
four
and
a
half
months
after
the
SEC
approved
several
spot
Bitcoin
ETF
applications
on
Jan.
10,
marking
an
industry
first.
Following
the
latest
announcement,
industry
experts
have
expressed
their
expectations
for
further
growth.

Sumit
Gupta,
co-founder
of
CoinDCX,
noted
that
Bitcoin’s
price
rose
significantly
after
its
ETF
started
trading
in
January,
suggesting
that
a
spot
Ether
ETF
could
drive
a
rally
of
up
to
60%.

“Bitcoin
rose
to
over
$73,000
from
$42,000
in
the
two
weeks
after
the
ETF
started
trading
on
January
11.
Data
suggests
that
10
US
spot
Bitcoin
ETFs
absorbed
548,556
BTC
worth
$36
billion
in
four
months.
Similarly,
it
is
anticipated
that
a
spot
Ether
(ETH)
ETF
could
drive
a
rally
of
as
much
as
60%,”
Gupta
told
crypto.news.

Lennix
Lai,
OKX’s
chief
commercial officer,
highlighted
the
potential
for
substantial
institutional
demand
for spot
Ethereum ETF,
envisioning passive
capital inflow
from
institutional
players
of
around
$300-500
million
in
the
first
week.

He
emphasized
the
relevance
of
this
development,
noting
that
Ethereum’s
design
as
a
Proof-of-Stake
(PoS)
token
could
attract
significant
institutional
interest.

“In
addition,
Ethereum
offers
more
utilities
than
many
realize.
It’s
the
go-to
product
for
participating
in
DeFi
products,
such
as
staking.
As
such,
the
approval
of
the
ETH
ETF
could
potentially
attract
more
users
to
engage
with
Web3
products,”
Lai
concluded.

However,
some
experts
caution
that
the
price
of
Ether
might
not
immediately
surge
despite
the
landmark
approval.

Asal
Alizade,
co-founder
of
Blocklogica,
explained
that
the main market
shift
occurred
with
the
approval
of
Bitcoin
ETFs,
which
facilitated
the
entry
of bigger cash
flow
from
traditional
investment
institutions.
Thus,
the
Ether
ETF
approval
might
not
lead
to
a
dramatic
market
change
but
could
gradually
influence
EVM-based
assets
and
create
minor
trends
in
the
crypto
market.

Benjamin
Charbit,
CEO
of
Darewise
Entertainment,
added
that
the
ETF
approval
had
likely been
priced in
for
some
time,
similar
to
the
Bitcoin
ETF
approval
earlier
in
the
year.
“I
would
not
see
it
as
a
negative
sign;
on
the
contrary,
it
shows
a
form
of
maturity
similar
to
what
has
happened
for
decades
in
traditional
finance
(TradFi),”
said
Charbit.