• Ether (ETH) ETFs have cleared a major hurdle, though the SEC hasn’t cleared them for trading yet
• A Bloomberg analyst said a week ago that it would have seemed crazy to think these ETFs would get SEC approval
• The SEC has approved the listing of spot Ether ETFs, but still needs to approve the actual products
Ether exchange-traded funds (ETFs) have cleared a major hurdle after the Securities and Exchange Commission (SEC) approved proposals to list them on Cboe’s BZX Exchange. However, the SEC has not yet cleared the ETFs to actually begin trading.
Background on Ether ETF Proposals
Several Ether ETF proposals have been filed with the SEC, including from asset managers WisdomTree and VanEck. The SEC published its approval for listing and trading the Ether ETFs on the BZX Exchange last week. This approval marks a big step forward for the Ether ETF proposals, as it signals the SEC is comfortable with the proposals meeting requirements for listing standards and preventing fraud and manipulation.
However, the SEC still needs to approve the ETFs before they can begin trading. The proposals are now subject to a period allowing for public feedback and comments before final approval.
Analysts Surprised by SEC’s Approval
Many analysts have been surprised by the SEC’s approval to list the Ether ETFs, as the agency has rejected or delayed decisions on several Bitcoin ETF proposals in the past.
“A week ago, I would’ve said you were a little crazy to think that these ETFs were going to get SEC approval,” said Bloomberg Intelligence analyst James Seyffart.
The approval indicates the SEC is becoming more comfortable with cryptocurrency-based ETFs as the market matures. However, the agency said its approval should not be taken as an endorsement of Ether or the ETFs.
Uncertainty Remains on Final Approval
It remains uncertain whether the SEC will ultimately approve the Ether ETFs for trading. The proposals could still face opposition or delays during the public comment period.
“This is the end of the beginning, not the beginning of the end,” said lawyer Jake Chervinsky, who focuses on crypto policy and regulation. He expects a decision in December at the earliest.
The SEC has outlined several reasons for rejecting Bitcoin ETF proposals in the past, including concerns around liquidity, custody and potential for fraud and manipulation. It remains to be seen whether regulators feel these issues have been sufficiently addressed for Ether ETFs.
Conclusion
While the SEC’s approval to list Ether ETFs is a milestone, it does not guarantee the products will be trading on public markets anytime soon. Significant uncertainty remains around if and when the SEC will ultimately green light the Ether ETF proposals. Analysts are surprised but cautiously optimistic about the SEC’s evolving perspective on crypto-based ETFs. The next few months will be crucial in determining the fate of the proposals.
