SEC Approves First Spot Ethereum ETFs

The SEC has approved the first spot Ethereum ETFs, offering direct exposure to Ethereum (ETH).
SEC Approves First Spot Ethereum ETFs

Key Takeaways

  • SEC approves the first spot Ethereum ETFs.
  • Approval odds for these ETFs increased from 25% to 75% in one day.
  • The House passed FIT 21, aiming to establish a regulatory framework for digital assets.

The U.S. Securities and Exchange Commission (SEC) has approved the first batch of spot Ethereum (ETH) ETFs.

This decision follows the SEC’s approval of spot Bitcoin ETFs in January, which became the fastest growing ETFs in history according to BlackRock CEO Larry Fink.

The new spot Ethereum ETFs will allow investors to gain direct exposure to Ethereum, the second-largest digital asset by market capitalization, without needing to purchase and store the cryptocurrency themselves.

However, Bloomberg ETF analyst James Seyffart clarified:

This does not mean they will begin trading tomorrow. This is just 19b-4 approval. Also needs to be an approval on the S-1 documents which is going to take time.

The approval odds for these ETFs increased dramatically when Bloomberg analysts Eric Balchunas and James Seyffart raised their approval odds from 25% to 75%.

Balchunas noted:

Hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling.

The classification of Ethereum has been debated, with some critics arguing it passes the Howey test, classifying it as a security.

FIT 21

In related news, the House passed the Financial Innovation and Technology Act 21 (FIT 21) yesterday, aiming to create a regulatory framework for digital assets.

Patrick McHenry, Chairman of the U.S. House Committee on Financial Services, stated:

It creates a legal framework, giving the SEC a proper role, and the CFTC a proper role, rather than the set of conflicting regulatory actions that those two agencies have taken over the last ten years.

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