SEC approves Ethereum ETF, marking an important milestone in the cryptocurrency industry
On May 23, 2024, the U.S. Securities and Exchange Commission (SEC) officially approved a number of Ethereum ETFs, including products from companies such as BlackRock, Fidelity and Grayscale. This provides investors with a new way to invest in Ethereum through traditional financial channels, becoming the second cryptocurrency ETF after the spot Bitcoin ETF.
Although the 19b-4 form has been approved, the ETF issuer still needs to wait for the S-1 registration statement to take effect before it can be officially traded. This process may take several weeks. After the approval news was announced, the price of Ethereum rose slightly and is currently reported at US$3,807, a 24-hour increase of 1.3%.
Since September last year, major fund institutions have successively applied for Ethereum ETFs, and market expectations have changed. Bloomberg analyst Eric Balchunas raised the probability of approval from 25% to 75% this week. The SEC asked Nasdaq and the Chicago Board Options Exchange to speed up the update of the 19B-4 document, suggesting that they may be ready to approve the application. However, formal trading still requires the SEC to approve the S-1 registration statement, which may take several months.
Several issuers have indicated in their application documents that they do not include pledge clauses, which is a necessary condition for the SEC to accept Ethereum spot ETFs. The SEC has made it clear that unpledged Ethereum is not considered a security, which shows a clear regulatory boundary.
As the election year approaches, cryptocurrencies have become an important voting group. Trump accepted cryptocurrency donations and criticized the Biden administration's cryptocurrency policy. The Biden administration may therefore be more lenient on cryptocurrency policies.
In addition, the FIT 21 Act and the SAB 121 accounting rule are also the focus of recent regulatory attention. The FIT 21 Act aims to clarify the regulatory framework for cryptocurrencies. It has been passed by the House of Representatives and will next enter the Senate for a vote. The SAB 121 accounting rule requires companies to record cryptocurrencies held by customers as liabilities and is currently awaiting the president's signature.
This approval marks an important milestone in the cryptocurrency industry. Although formal trading still takes time, it provides new opportunities for investors and indicates that the regulatory environment may improve further in the coming months.