Ethereum ETFs Coming Soon to US Markets

The Securities and Exchange Commission (SEC) is poised to green-light Ethereum (Ether) ETFs after years of pushback. As of this writing, it was not clear as to when these products would commence trading.

Earlier this year, the SEC approved spot Bitcoin ETFs for trading after conceding a loss in a legal battle. Billions in investor funds quickly moved into the exchange-traded products, which have been viewed as legitimizing the crypto sector and making it easier for retail investors to participate in crypto markets.

Ether is the second most popular crypto in the world with around $442 billion in market capitalization. The value of Ether jumped by over 18% following the anticipation that an Ethereum ETF was near.

SEC Chairman Gary Gensler has long been decidedly anti-crypto, but the Ethereum ETF approval shows that he is losing the battle. While Gensler has acknowledged that Bitcoin is not a security, he has been hesitant to make the same declaration with Ether, even though the previous administration publicly announced that Ether was not a security.

Yesterday, Benjamin Schiffrin, Director of Securities Policy at Better Markets – a left-wing policy group, issued a statement criticizing the SEC’s decision to allow ETH ETFs. Schiffrin said:

“Today, the SEC doubled down on its historic mistake of approving spot Bitcoin ETPs. Its decision to approve spot ether ETPs will only enable investors to be further victimized by the lawless crypto industry. Just last week, the Department of Justice charged two brothers with exploiting the integrity of the Ethereum blockchain to fraudulently obtain $25 million worth of cryptocurrency in 12 seconds. The SEC’s decision to approve ETPs where the underlying asset is ether, the native currency on the Ethereum network, is inexplicable.

“Indeed, while last week’s indictment concerning activity on the Ethereum network highlights the dangers that spot ether ETPs pose specifically, it is only the latest in a long line of lawlessness in the crypto industry generally. Sam Bankman-Fried, the FTX founder who was convicted of stealing billions of dollars, and Changpeng Zhao (CZ), the Binance founder who pled guilty to money laundering, have been sent to prison in the just last few months. The SEC’s approval of spot ether ETPs provides the crypto industry with just another way to endanger retail investors and threaten the broader financial system.”

Schiffrin claimed the SEC’s decision to allow spot-traded Ether ETFs means the agency has “failed to live up to its mission to protect investors and the markets.” He did not mention market demand for the digital asset nor the fact that a regulated product incorporates investor protections.

Daniel Seifert, UK Country Director of Coinbase, welcomed the news of the ETF approval.

“This move solidifies the fact that cryptocurrency is not merely a trend, representing a global transition towards digital assets in order to reshape the existing financial system. The expansion of crypto’s utility will have significant effects on innovation, and we expect to see an escalation of activity in the market. Coinbase is excited to serve asset managers with the full suite of Prime products and further the positive impact on the industry.”

Sergei Gorev, risk manager at YouHodler, predicted that ETH would soon top $5000.

“Looking ahead, our long-term outlook remains positive, with the expectation that the entire crypto market will eventually surpass the current $16 trillion gold market capitalization, said Gorev. “We continue to be optimistic about the dynamics of the global crypto market. Over the last few weeks, quite a lot of money has entered the crypto market through investing in meme coins, which are most popular among newcomers.”

“Ethereum ETF approvals are the latest milestone in the US government’s evolving stance towards crypto,” said Alex Adelman, CEO and Founder of Lolli.

“The US government now clearly views the digital asset space as an opportunity to establish global leadership in the financial and technology sectors, especially during an election year. Bitcoin was founded on the principles of financial sovereignty and free market monetary policy.  By introducing innovation to global financial systems, bitcoin and crypto are closely aligned with free market ideals that will continue to drive US economic leadership. The government is now creating a regulatory environment that fosters digital asset innovation, channeling capital from the world’s biggest institutions into the ecosystem. With Bitcoin ETFs already drawing over $58 billion in net inflows since their debut, we can expect Ethereum ETFs to attract similarly strong inflows and spur price increases across the crypto ecosystem.”

Ben Rose, Binance’s general Manager in Australia and New Zealand, said the approval was evidence of growing demand from institutional investors as they seek more opportunities in crypto beyond Bitcoin. Rose said the approval cements Ethereum’s legitimacy as an asset.

The US is not alone in allowing ETPs based on crypto to trade. In the UK, the Financial Conduct Authority (FCA) recently approved WisdomTree’s Bitcoin and Ether ETPs for listing on the London Stock Exchange. Trading is scheduled to start on May 28th.

 


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