US SEC approves exchange applications to list spot Ethereum ETFs; token drops 5%

The US Securities and Exchange Commission (SEC) approved applications from Nasdaq, CBOE and NYSE to list exchange-traded funds (ETFs) tied to the price of Ethereum (ether) on Thursday, potentially paving the way for the crypto products to begin trading later this year.
 

While the ETF issuers also have to get the green light before the products can launch, the latest approval is a major surprise win for those firms and the cryptocurrency industry, which were expecting the SEC to reject the filings. Prior to this, Bitcoin ETFs were already approved in January this year, sparking a renewed interest in the crypto space.
 

Nine issuers including VanEck, ARK Investments/21Shares and BlackRock are likely to launch ETFs tied to the second-largest crypto, Ethereum, after the SEC in January approved bitcoin ETFs in a watershed moment for the industry. Market participants see it as a significant step towards getting the products trading.
 

The US SEC’s approval of Ethereum spot ETFs following Bitcoin spot ETFs marks a significant advancement in the crypto market, enhancing investor access and liquidity. Institutional investors can now gain a regulated avenue for exposure, fostering broader market participation. This milestone indicates growing regulatory acceptance of cryptos, said Edul Patel CEO at Mudrex.
 

"After Hong Kong and the US, it is likely that many more countries will follow suit in approving spot ETFs of Bitcoin and Ethereum. Such approvals can boost investor confidence, stimulate market growth, and encourage further innovation in the sector, ultimately leading to a more robust and mature global financial landscape," he said.
 

Thursday's move was nothing less-than a surprise as it was the deadline for the SEC to decide on VanEck's filing. Market participants were bracing for the thumbs-down as the SEC had not engaged with them on the applications.
 

The exchange applications had sought SEC approval for a rule change required to list new products, but the issuers still need the SEC to approve ETF registration statements detailing investor disclosures before they can start trading.
 

The US Securities and Exchange Commission (SEC)'s green light for spot Ether ETFs is a big moment for the crypto industry. It builds on the success of Bitcoin ETFs, offering a secure and regulated way for investors to access Ether. This broader acceptance will fuel mainstream adoption and reflects a maturing regulatory environment, said Sumit Gupta, co-founder at CoinDCX.
 

"The classification of Ethereum as a security could have significant ramifications for the Web3 industry. Ethereum is the foundation for a vast ecosystem of decentralized applications (dApps) and Web3 projects. It is anticipated that a spot Ether (ETH) ETF could drive a rally in the asset class to new highs," he said.
 

However, despite the positive news, Ethereum dropped about 5 per cent in the last 24 hours to $3,655 as of 13.30 hours IST. The total market capitalization of Etheruem stood little more than $440 billion, while the total marketcap of all crypto assets stood at $2.5 trillion as of same time.