The US Securities and Exchange Commission (SEC) has given final approval for the launch and listing of 8 Ethereum spot exchange-traded funds (ETFs).
With this approval, the SEC is marking a significant milestone in the evolution of the cryptocurrency market, opening the door to a new era of investment in digital assets.
The SEC's final approval of Ethereum ETFs comes months after the agency gave the green light to Bitcoin ETFs and partially approved the launch of ether-based funds in May.
This approval will allow US investors to access the second largest cryptocurrency on the market in an easier and regulated manner by capitalization.
At the time of writing this article, the ETH price has not reacted to the news, trading around $3.480 per unit, according to data from CoinMarketCap.
Ethereum ETFs begin trading this Tuesday
The SEC has allowed the registration statements for ether exchange-traded funds, which were filed by the largest investment firms in the country and the world, to become effective as of Monday, so that the same Start trading today, Tuesday, July 23.
Among the investment firms that received regulatory approval to launch their respective spot ETFs are: 21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, VanEck, Invesco Galaxy and Grayscale Investments.
The approval of these spot ETFs represents a significant step in the integration of decentralized cryptocurrencies into the traditional financial system. Ethereum ETFs will allow retail and institutional investors to gain exposure to ether through investment vehicles that are regulated and easy to trade, without the need to directly own the cryptocurrency or worry about its storage and security.
Ophelia Snyder, co-founder and president of 21Shares, told The Block that the launch of its spot ETF, dubbed “21Shares Core Ethereum ETF (CETH),” marks an important milestone for the firm and for US investors. According to her statements, this approval represents further proof that Cryptocurrencies as an investment asset class are here to stay.
Likewise, Cynthia Lo Bessette, head of digital asset management at Fidelity Investments, welcomed the regulatory approval received from the SEC, highlighting that this allows meet the growing needs and demands of its customers and investors in the digital asset market.
Analysts expect moderate demand
While the SEC's regulatory approval of these spot investment vehicles is positive news, some analysts predict that demand for Ethereum ETFs could be lower than that for Bitcoin ETFs.
Eric Balchunas, a senior ETF analyst at Bloomberg, suggested that these investment vehicles could attract 10% to 15% of the assets that Bitcoin-based products received, which would be equivalent to between $5.000 billion and $8.000 billion in their first months.
To date, Bitcoin-based spot ETFs have seen around $17.000 billion in net inflows since their initial launch in January of this year.
On the other hand, the approval of Ethereum funds in the United States has generated a new debate on the possibility of including staking within these investment vehicles, in order to maximize the returns of investors in the future.
Initially, investment firms included ETH staking in their registration statements for spot ETFs. However, this feature was rejected by the SEC and subsequently removed by the firms during the fund approval process.
However, the US SEC's decision regarding ETH staking contrasts with that taken by the Hong Kong securities regulator, which Yes, consider the approval of this attractive feature for investors in spot funds. Because of this, experts like Jake Chervinsky, legal director at Variant, believe that it is only a matter of time before the SEC authorizes the inclusion of staking within the recently approved investment funds.
ETH price without reaction
While the launch and listing of Ethereum spot ETFs could have a significant impact on the price of ETH, so far, the cryptocurrency remains trading around $3.480 per unit. This represents a correction of 1,12% in the last 24 hours and a slight increase of 0,23% in the last week.
Source: CoinMarketCap
However, some analysts predict that the price of ether could reach between $5.000 and $6.500 per unit in the coming months, as a result of institutional demand for exchange-traded funds in the US market.
Regardless of what happens to the price of ETH in the coming months, what is certain is that the SEC's regulatory approval of Ether spot ETFs significantly validate the legitimacy of cryptocurrencies as a new and emerging investment asset class.
Today, the same people and companies that swore off cryptocurrencies are now considering these digital assets as legitimate assets and are creating new products around them. Therefore, the approval of Ethereum spot ETFs in the United States is marking a crucial moment in the evolution of the cryptocurrency market and its integration with traditional finance.
