U.S. regulators have given final approval to a spot exchange-traded fund (ETF) that holds Ethereum’s ether. (Ethereum)This will give Americans access to the second major cryptocurrency through an easily transactable medium.
The decision brings to an end a years-long process to get an Ethereum ETF approved by the Securities and Exchange Commission and follows the regulator’s approval of Bitcoin. (Bitcoin) ETF in January. Packaging Ethereum into an ETF could make it more palatable to traditional investors, as the fund could be bought and sold through a traditional brokerage account. Since its debut in January, the Bitcoin ETF has attracted tens of billions of dollars in investments.
Approval was not certain until a few weeks ago. But in late May, SEC officials Suddenly they started fighting After a long silence, negotiations began with potential ETF issuers. On May 23, the regulator Approved an important applicationThe latest decision paves the way for full approval.
“We’ve now fully entered the crypto ETF era,” said Matt Hogan, chief investment officer at Bitwise. “Investors now have access to over 70% of the highly liquid crypto asset market through low-cost ETPs.”
“As one of the first to file for an Ethereum ETF in 2021, we have long believed that investors should be able to invest in Ethereum through means that are close and familiar to them,” said Kyle D’Acruz, head of digital assets at VanEck. “If Bitcoin is digital gold, then Ethereum is the open-source App Store, a gateway to thousands of applications that leverage blockchain technology.”
The approval and start of trading of a Bitcoin spot ETF in January was the most successful launch in the history of exchange-traded funds in terms of the speed of inflows, with the price of the largest cryptocurrency soaring more than 58% in just two months to a new all-time high.
Some analysts predict that a Spot ETH ETF could drive Ethereum prices, Up to $6,500However, inflows into these funds are unlikely to be as high as those into Bitcoin-focused funds.
Research firm Steno Research predicts the newly launched ETF could attract $15 billion to $20 billion worth of inflows in its first year, roughly the same amount of money that a spot Bitcoin ETF garnered in just seven months. According to the firm’s report, Ethereum lacks the “first-mover advantage” that Bitcoin had and the powerful story that has driven Bitcoin’s belief as “digital gold” among many of its supporters.
Updated (July 22, 2024 21:35 UTC): Adds a comment from the publisher.
