Ethereum ETFs: SEC Approves Second-Largest Cryptocurrency
The TDR Three Key Takeaways on Ethereum ETFs Approved by SEC
- SEC Approval: U.S. regulators have given final approval for spot exchange-traded funds (ETFs) that hold Ethereum’s (ETH), expanding American investors’ access to the second-largest cryptocurrency.
- Investor Accessibility: The approval of Ethereum ETFs follows the success of Bitcoin ETFs and aims to make Ethereum more accessible to traditional investors through conventional brokerage accounts.
- Market Impact: Analysts predict substantial inflows into Ethereum ETFs, though possibly less than Bitcoin ETFs, which could still significantly impact Ethereum’s price and market dynamics.
The U.S. Securities and Exchange Commission (SEC) has finalized approval for exchange-traded funds (ETFs) that hold Ethereum’s ether (ETH), making it the second major cryptocurrency available to American investors via these easy-to-trade vehicles. This decision concludes a prolonged effort to secure approval for Ethereum ETFs, which now join the ranks of Bitcoin ETFs approved earlier this year. Since their debut, Bitcoin ETFs have attracted significant investment, highlighting the appeal of these funds to conventional investors who prefer trading through traditional brokerage accounts.
The following industry professionals shared their thoughts with CoinDesk. Matt Hougan, Chief Investment Officer at Bitwise, “We’ve now fully entered the ETF era of crypto. Investors can now access more than 70% of the liquid crypto asset market through low-cost ETPs.” This sentiment is echoed by Kyle DaCruz, Head of Digital Assets at VanEck, who remarked, “Being the first to file for an Ethereum ETF back in 2021, we have long believed investors should have access to Ethereum exposure in a vehicle they find accessible and familiar.”
The approval process, which seemed uncertain until recently, saw a breakthrough in late May when the SEC engaged with ETF issuers and approved a key filing, paving the way for this final decision. The anticipation surrounding Ethereum ETFs has led to predictions of significant market activity. Research firm Steno Research forecasts inflows of $15 billion to $20 billion within the first year, although they suggest these numbers might not reach the levels seen with Bitcoin ETFs due to Ethereum’s lack of a “first-mover advantage” and a strong narrative like Bitcoin’s “digital gold.”
Despite these differences, the approval of Ethereum ETFs represents a significant milestone in the cryptocurrency market, likely driving up the price of ether and increasing its adoption among traditional investors.
