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Ether (ETH) ETFs Approved by SEC, Bringing Popular Funds to Second-Largest Cryptocurrency
US regulators have given final approval for spot exchange-traded funds to hold Ethereum ether (ETH)giving Americans access to a second major cryptocurrency through easily tradable instruments.
The decision concludes a years-long process to get ether ETFs approved by the Securities and Exchange Commission and follows the regulator’s approval for bitcoin. (BTC) ETFs in January. Wrapping ether in an ETF wrapper could make them more attractive to mainstream investors, since the funds can be bought and sold through traditional brokerage accounts. Since their debut in January, bitcoin ETFs have attracted tens of billions of dollars in investment.
Approval did not seem certain just a few weeks ago. But in late May, SEC officials he suddenly started to get involved with aspiring ETF issuers after a long silence. Then, on May 23, the regulator approved a key depositpaving the way for full approval through the final decision.
“We are now fully into the era of cryptocurrency ETFs,” said Matt Hougan, Bitwise’s chief investment officer. “Investors can now access over 70% of the liquid cryptocurrency market through low-cost ETPs.”
“As the first to file for an Ethereum ETF in 2021, we have long believed that investors should have access to Ethereum exposure in a vehicle they find accessible and familiar,” said Kyle DaCruz, head of digital assets at VanEck. “If Bitcoin is digital gold, then Ethereum is the open-source App Store and gateway to exposure to the thousands of applications that will utilize blockchain technology.”
The approval and start of trading of spot bitcoin ETFs in January, which turned out to be the most successful launch in the history of exchange-traded products in terms of the speed with which money flowed into them, pushed the price of the largest cryptocurrency to new all-time highs, after surging more than 58% in just two months.
Some analysts predict that while a spot ETH ETF could move the price of ether up to $6,500inflows into those funds will not even remotely compare to their Bitcoin-focused counterparts.
Research firm Steno Research predicts that the newly launched ETFs could see $15 billion to $20 billion in inflows in the first year, which is about the same amount that spot bitcoin ETFs received in just seven months. Ethereum doesn’t have the “first mover advantage” that bitcoin had and doesn’t have a narrative as strong as bitcoin’s “digital gold” sentiment among many proponents, a report from the firm said.
UPDATE (July 22, 2024, 21:35 UTC): Adds broadcaster comments.