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The US Securities and Exchange Commission (SEC) has made a groundbreaking decision by greenlighting the potential launch of eight exchange-traded funds (ETFs) tied to ether, the world’s second-largest cryptocurrency. This move comes on the heels of the SEC’s earlier approval of bitcoin ETFs, marking a significant shift in the regulatory landscape for digital assets.
The approval of ether ETFs represents a notable departure from the SEC’s historical stance on the cryptocurrency industry. Legal victories, such as Grayscale’s successful challenges against the SEC’s rulings, have played a pivotal role in prompting the agency to reconsider its approach to spot ETF applications.
Crucial rule changes paved the way for the SEC’s approval, enabling ETFs to directly invest in ether, the native cryptocurrency of Ethereum. Major financial institutions including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton have received the regulatory green light. However, further approvals are required before these products can officially enter the market.
The SEC’s decision follows months of anticipation, with the regulator unexpectedly providing feedback on pending applications earlier in the week. This swift action is likely in response to looming deadlines for responses to ether ETF applications.
The anticipation surrounding these approvals has triggered a surge in ether’s price, soaring over 20% since Monday and more than 60% since the beginning of the year. This surge underscores investors’ growing confidence in the mainstream acceptance of cryptocurrencies.
Ether currently commands a market capitalization exceeding $450 billion, constituting approximately 18% of the total cryptocurrency market value, according to CoinMarketCap data cited on Yahoo Finance.
Industry experts have hailed the SEC’s approval of spot Ether ETFs as a watershed moment for crypto adoption within capital markets. Sergey Nazarov, co-founder of Chainlink, emphasized the significance of Ethereum ETF approval in fostering mainstream adoption. Sumit Gupta, Co-founder of CoinDCX, described the SEC’s decision as a maturing regulatory environment conducive to mainstream adoption.
The SEC’s approval lays the groundwork for the potential inclusion of ether in investment portfolios, including retirement accounts and pension plans. Furthermore, this development is expected to buoy bitcoin prices, which have already been gaining traction since receiving approval earlier this year.
In Washington, a bill aimed at reducing the SEC’s influence on crypto regulation and establishing the Commodity Futures Trading Commission (CFTC) as the primary regulator for cryptocurrencies has passed the US House of Representatives. This legislative initiative reflects evolving attitudes toward crypto regulation and underscores the dynamic nature of the regulatory landscape.
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