The cryptocurrency market is about to experience a major new turning point with the imminent approval of Ethereum spot ETFs by the SEC. Are we going to see a democratization of investment on Ethereum at the start of the summer?
ETF Ethereum spot: a more than expected launch
The United States Securities and Exchange Commission (SEC) could give approval for spot Ethereum ETFs by next week, July 4, 2024, according to a Reuters report. This decision, long awaited by the crypto sector, could mark a new turning point in the institutionalization of cryptocurrencies.
👉 To learn more about spot Ethereum ETFs – How to invest in a spot Ethereum ETF?
A total of 8 asset managers have filed applications with the SEC seeking approval for their Ethereum spot ETF. Among them are several crypto investment giants like BlackRock, VanEck, Franklin Templeton and Grayscale Investments.
Most of them had already launched spot Bitcoin ETFs last January, after several years of struggle with American regulators.
Grayscale, which runs the largest Ethereum fund currently, hopes convert your existing Ethereum trust, ETHE, into a spot Ethereum ETF. The investment fund had already made this maneuver with Bitcoin (BTC), when converting its Bitcoin Trust, GBTC, into a spot Bitcoin ETF.
According to our information, discussions between asset managers and regulators are entering their final phase. The modifications to be made to the documents would only concern “minor” points. A lawyer working with one of the issuers said “that it was only a matter of time” and that the Ethereum spot ETF were “probably only a week or two away from their approval”.
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A green light for institutional adoption?
While the approval of spot Bitcoin ETFs was a resounding success, attracting more than $8 billion in a few weeks, some analysts are more cautious about investor enthusiasm for Ethereum spot ETFs.
“Ethereum does not have the same market capitalization as Bitcoin, and its trading volumes are also lower”said James Butterfill, head of research at Coinshares. “Inflows could therefore be much lower when the Ethereum spot ETFs launch.”
Over the month of June, the price of Ether (ETH) fell slightly with a drop of 10%, alongside a drop of 8.3% for Bitcoin. Most of the time, Bitcoin fluctuations have a significant impact on the price of Ether.
👉 Also in the news – VanEck files first-ever Solana ETF (SOL) application in the US
The approval of Ethereum spot ETFs by the SEC would mark a new milestone in the adoption of cryptocurrencies by institutional investors. Indeed, the ease of investment offered by ETFs could attract a wider audience to Ether, thus contributing to its growth and its democratization among the general public.
Time will tell whether the enthusiasm for spot Ethereum ETFs will be as strong as for spot Bitcoin ETFs, but one thing is certain: the imminent approval of these products by the SEC is a sign of the changing financial landscape in the United States and a growing interest in cryptocurrencies.
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Source: Reuters
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