Ethereum ETF Approval Is The Next Big Crypto Momentum Driver, Analysts Say

The Securities and Exchange Commission late Thursday approved a rule change that would allow spot ether ETFs to trade in the U.S. Ethereum price and bitcoin rebounded slightly Friday. Cryptocurrency stocks swung higher.

The SEC approved the rule 19b-4 forms for eight ether ETF applications, including BlackRock (BLK), Fidelity (FNF), Grayscale, ARK Invest, VanEck, Invesco Galaxy and Franklin Templeton. The S-1 registration statements still need to be approved before the ETFs can officially debut. The SEC order did not provide a timetable for when the S-1 forms would be approved. It also didn't offer a date they would begin trading.

The ether ETF order comes after the SEC in January approved spot bitcoin ETFs to launch on U.S. exchanges. Ether is the second-largest cryptocurrency and powers the ethereum network. The ethereum network operates on a proof-of-stake consensus. It hosts various applications including NFTs, the tokenization of real-world assets, and Web3 games.

"We applaud this decision, as we believe the evidence clearly shows that ETH is a decentralized commodity, not a security," Matthew Sigel, head of digital assets research at VanEck, wrote on social media platform X following the order. "We expect the improved political backdrop will lead to further victories for digital asset investors and developers."

The VanEck spot ethereum ETF will trade on the CBOE exchange after the final approvals.

Ethereum ETFs, Another Major Milestone

"The ethereum ETF approval is a second large step forward for the crypto industry," Sergey Nazarov, co-founder of Chainlink, wrote in a note to IBD. Chainlink's network connects the blockchain to real-world data sources to automate smart contracts. "It proves that the capital markets are now getting involved in the crypto industry in earnest for some of their largest user bases and most widely-used products."

The approval order proves Chainlink's thesis that capital markets will be the next large source of adoption for the crypto industry, Nazarov says