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In a major victory for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) on Thursday approved applications from Nasdaq, CBOE, and NYSE to list eight exchange-traded funds (ETFs) tied directly to the price of Ethereum. These include offerings from BlackRock, Fidelity and Grayscale.
This long-awaited decision paves the way for the first-ever Ethereum ETFs to begin trading in the United States later this year, potentially opening up access to the world's second-largest cryptocurrency for a wider range of investors.
While the SEC greenlit exchange proposals for these funds, individual ETF applications still need to pass muster. This means more waiting for investors eager to gain exposure to Ethereum through a regulated product. Industry insiders speculate it could be weeks, or even months, before these ETFs start trading.
This delay is likely due to the SEC's last-minute engagement with exchanges. The initial impression was a rejection was coming, with the commission being tight-lipped on the applications. Then, a sudden request for revisions sent issuers scrambling to meet a tight deadline, while sending the price of ETH 25% higher overnight.
This begs the question – what caused the SEC's apparent change of heart? Was it regulatory progress catching up with a maturing market, or a political nudge?
The answer remains murky, but one thing is clear: this is a win for the crypto industry. It follows hot on the heels of the UK approving crypto products and a landmark US bill seeking regulatory clarity for the space. This wave of positive developments suggests crypto is finally being taken seriously by financial institutions and governments.
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However, the SEC's cautious approach with Ethereum ETFs highlights a lingering concern – complexity. Unlike Bitcoin, Ethereum's functionality goes beyond just being a store of value. This intricacy could lead to a more rigorous review process for the underlying assets in these ETFs. Ethereum ETF issuers amended their 19b-4 filings with the regulator to remove staking from their applications before the deadline in a bid to push it through.
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