"The probability of approval of the spot Ethereum ETF has increased to 75%, and cryptocurrencies have become political bargaining chips in the election year"
AI key points:
1. The probability of ETF approval has been raised: Eric Balchunas, an ETF analyst at Bloomberg, raised the probability of approval of the spot Ethereum ETF (Exchange-Traded Fund) from 25% to 75%, because he heard that the SEC (U.S. Securities and Exchange Commission) may make a 180-degree turn on this issue and has asked ETF exchanges to accelerate the update of 19b-4 applications.
2. Key time points: The SEC faces a deadline of May 23 and May 24 to make a decision on VanEck and ARK's Ethereum ETF applications. Although the approval results may not be seen in May, August may usher in a turning point, because the deadlines for Fidelity and BlackRock's Ethereum ETF applications are August 3 and August 7, respectively.
3. Political factors: Analysts believe that political factors have become the key reason for the shift in ETF approval. In an election year, the SEC's rejection of the spot ETH ETF may consume its political capital and be unfavorable to the Democratic government's election prospects. In addition, the Senate passed the SAB 121 bill to repeal the restrictions on cryptocurrency custody. Although it faces a possible veto by President Biden, if it is finally signed or not taken action, it will reflect the Democratic government's shift in attitude in the field of cryptocurrency.
4. Impact of the repeal of SAB 121: SAB 121 requires digital asset custodians to treat digital assets as liabilities and hold corresponding cash at fair value to offset, which hinders financial companies from custodial cryptocurrencies. Its repeal is expected to lift this restriction and promote the acceptance and application of cryptocurrencies in the traditional financial system.
In summary, with the political considerations of the election year, regulatory policy dynamics (such as the possibility of repealing SAB 121), and the accelerated update of exchange applications, the possibility of approval of the spot Ethereum ETF has increased significantly, especially in August.
The 19b-4 and S-1 forms in the U.S. Securities Exchange Act are two very important documents in the securities market, and they play a key role in the approval process of ETFs (exchange-traded funds). The following explains these two in detail and discusses the approval of the spot Ethereum ETF and the role of cryptocurrency in politics.
Differences between 19b-4 and S-1:
Form 19b-4
Purpose: Form 19b-4 is usually submitted by a stock exchange or other self-regulatory organization to the U.S. Securities and Exchange Commission (SEC) to apply for approval of changes to its rules.This includes exchange operating rules, listing standards, fee structure, etc.
Importance: For ETFs, any rule changes regarding their listing and trading need to be approved by the SEC by submitting Form 19b-4.
S-1 Form
Purpose: Form S-1 is a registration statement submitted to the SEC by companies that wish to publicly issue securities in the United States. For ETFs, this means that issuers need to register their new fund products by submitting Form S-1 and provide detailed information required by investors, including the fund's structure, investment objectives, risk factors, etc.
Importance: Approval of S-1 is a necessary step before ETFs begin trading, as it ensures transparency and fairness and protects the interests of investors.
