At least three of the eight asset managers seeking to launch exchange-traded funds (ETFs) linked to the spot price of Ethereum have received preliminary approval from the US Securities and Exchange Commission (SEC), according to sources cited by Reuters.
Ethereum, the native cryptocurrency of the Ethereum blockchain, is the world’s second most popular cryptocurrency. The proposed ETFs, however, are securities that enable investors to bet on multiple assets, thereby mitigating financial risk and exposure.
Full approval from the SEC requires the applicants to submit their final offering documents by the end of this week, with all eight ETFs expected to launch simultaneously. The asset managers likely to receive the SEC’s green light on July 23 include major investment firms BlackRock and Fidelity, as well as crypto index fund manager Bitwise.
According to Bitwise Chief Investment Officer Matt Hougan, Ether spot ETFs are anticipated to generate $15 billion in net inflows within the first 18 months of trading. Hougan also suggested that these ETFs could have a greater impact than those for Bitcoin, citing structural reasons such as Ethereum’s short-term inflation rate of zero percent.
In January, nine US spot Bitcoin ETFs were launched, marking one of the most successful debuts in the history of the ETF market. This milestone followed years of regulatory challenges with the SEC, which had consistently rejected the products due to concerns over market manipulation.
The cryptocurrency market reached an all-time high in November 2021, briefly surpassing a $3 trillion valuation, according to GlobalData’s Cryptocurrencies Thematic Intelligence 2023 report. This surge followed earlier milestones of $1 trillion in January 2021 and $2 trillion in May of the same year. By the end of 2021, however, market value had dipped to $2.2 trillion amid fears of impending interest rate hikes by the Federal Reserve.
In 2022, poor macroeconomic conditions led to a broader decline in both stock and crypto markets. The crypto market’s downturn was further exacerbated by events such as the collapse of Terra and the bankruptcy of FTX.
“SEC approval for spot Ether ETFs imminent as crypto gains further mainstream acceptance” was originally created and published by Verdict, a GlobalData owned brand.
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