- The SEC approved Ethereum ETFs by Grayscale and ProShares
- Many other asset managers have submitted applications and are awaiting final approval before ETH ETFs hit the exchanges
- Experts expect a significant impact on ETH prices due to ETF inflows
In a landmark judgment in favor of the cryptocurrency market, the Securities and Exchanges Commission (SEC) approved two Ethereum exchange-traded funds (ETF) for listing on the New York State Exchange’s (NYSE) electronic trading platform, Arca, on July 17. The two Ethereum spot ETFs are Grayscale Ethereum Mini Trust and ProShares Ethereum ETF.
Over the past few months, the crypto community has been buzzing about a possible ETH ETF approval. These beliefs were further strengthened when Bitcoin ETFs were approved by the SEC earlier this year. Grayscale and ProShares submitted their applications after BTC ETF approval with the aim of letting investors have direct access to Ethereum.
After months of rigorous scrutiny, the approval finally came in, bringing forth a wave of reaction within the crypto community. The SEC has approved the Form 19b-4 filings, which allows Grayscale and ProShares to enlist ETH ETFs on the NYSE for trading. However, both parties are still awaiting the SEC’s final comments on the S-1 filing before the listing goes live on the Arca trading platform.
As one of the early applicants, Grayscale has been looking forward to the spot ETF approval for months. According to the Grayscale representative, the asset manager is “excited” about the journey ahead.
They mentioned:
“The Grayscale team continues to engage constructively with SEC staff as we seek full regulatory approval for US spot Ethereum ETPs.”
As per reports, the SEC has given preliminary approval to three spot ETH ETFs, claiming that these tokens can begin the trading process by July 23. However, there are pending discussions about eight other ETH ETFs and their possible approval. The SEC seeks certain amendments within the S-1 filings before giving these ETF tokens a “go-ahead” signal.
Some of the most prominent asset managers looking to launch their Ethereum ETFs include BlackRock, Fidelity, 21Shares, Bitwise, and Invesco Galaxy. The amended S-1 filings submitted by these managers on Wednesday include details of the fund structure and the management fees set by each company.
GrayScale has set a 2.5% management fee for Ethereum Trust, which is significantly higher than its peers. This move by GrayScale has sparked intense debates within the crypto community. BlackRock and Fidelity have decided to charge 0.25%, which seems to be reasonable.
The cryptocurrency community received the SEC’s approval of Ethereum ETF rather positively. Experts predict a bullish trajectory for the altcoin following the approval. According to Matt Hougan, the Chief Investment Officer at Bitwise, Ethereum ETFs may have a bigger impact on the altcoin’s price than Bitcoin ETFs.
He commented:
“The first few weeks could be choppy, as money may flow out of the $11 billion Grayscale Ethereum Trust (ETHE) after it converts to an ETP. By year-end, I’m confident the new highs will be in.”
Based on Hougan’s prediction, Ethereum ETF inflows could cause the token’s price to spike 47% and go beyond $5,000 by the end of 2024. Such an immense impact may drive in a pool of investors and open up a new trajectory for Ethereum.
The regulations around cryptocurrency were particularly stringent earlier. However, the latest Bitcoin and Ethereum ETF approvals signal a shift in the SEC’s stance toward crypto regulations. This indicates a new era of innovative releases and may pave the path for cryptocurrency’s further progress in the US.