SEC Approves Eight Ethereum (ETH) Spot ETFs

The SEC approves Form 19b-4 for eight Ethereum ETF issuers, opening the door for institutional investment, but S-1 registration statements are still pending.

The U.S. Securities and Exchange Commission (SEC) has made headlines recently by granting approval for Form 19b-4 to eight Ethereum exchange-traded fund (ETF) issuers, namely BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton.

The SEC has approved Form 19b-4 for eight Ethereum ETF issuers: BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. The ETF issuers still need to have their S-1 registration statements go effective before they can begin trading. It is…

— Wu Blockchain (@WuBlockchain) May 23, 2024

Speculation has risen about the possibility of XRP being the next cryptocurrency to receive approval for ETFs. Nonetheless, before trading can begin, the ETF issuers must ensure that their S-1 registration statements are effective. Bloomberg analyst James Seyffart suggests that this process could take a few weeks to complete.

SEC’s Accelerated Approval and Oversight

The SEC’s ruling approved the proposals on an accelerated basis, encompassing trusts that will hold spot ether, either wholly or partially. The SEC found these proposals consistent with the Exchange Act and its regulations, particularly Section 6(b)(5), which mandates that exchanges’ rules are designed to prevent fraudulent and manipulative acts and protect investors and the public interest.

Additionally, the proposals align with Section 11A(a)(1)(C)(iii) of the Exchange Act, ensuring the availability of information regarding securities transactions.

The SEC has previously outlined that exchanges listing bitcoin-based ETFs can meet their obligations through comprehensive surveillance-sharing agreements with regulated markets of significant size related to the underlying assets.

Although spot ether does not trade on the Chicago Mercantile Exchange (CME), the exchanges involved have such agreements through their membership in the Intermarket Surveillance Group. 

This facilitates the sharing of information available through CME’s surveillance of its markets, including ether futures. The SEC concluded that these agreements are sufficient to prevent fraud and manipulation, even though spot ether does not trade on the CME.

Reactions to the Approval

The crypto community has responded positively to the SEC’s approval. TopGcrypto highlighted that the approval could lead to increased liquidity and stability in the Ethereum market, signaling exciting times ahead for the crypto industry.

Ripple CEO Brad Garlinghouse hinted at the possibility of XRP becoming the next crypto ETF following the approval of Ethereum spot ETFs. Garlinghouse emphasized the significance of the SEC’s approval and the passing of the FIT21 crypto bill, describing these events as momentous for the industry.

#Ripple CEO Indirectly Confirms #XRP ETFs Coming. @bgarlinghouse @ZachRector7 $XRP #XRPArmyhttps://t.co/H6TMqWHsoc

— TheCryptoBasic (@thecryptobasic) May 24, 2024

Analyst Predictions and Market Performance

Market analysts have provided optimistic forecasts following the approval of Ethereum spot ETFs. Miles Deutscher, a market analyst, predicted that Ethereum’s price could surge to $6,446 by July if the ETFs receive final approval, drawing parallels to Bitcoin’s historical performance post-ETF approval. 

Deutscher expects a similar trajectory for Ethereum, anticipating a 75.17% increase in value. Standard Chartered analysts foresee significant inflows into Ethereum, predicting between $15 billion and $45 billion within the first 12 months of ETF approval. They suggest that Ethereum prices could reach $8,000 by the end of 2024, driven by these inflows and broader market trends.

Currently, Ethereum (ETH) is priced at $3,654, with a 24-hour trading volume of $40,730,127,309. This represents a 4.29% price decline in the last 24 hours but a 23.37% increase over the past week. Notably, the highest price ever recorded for Ethereum was $4,878.26 on November 10, 2021, which is 24.73% higher than the current price.