SEC Approves Ether ETFs

Share
© Getty
While the Ethereum ETF's approval by the SEC marks a significant regulatory shift towards digital assets, its performance remains uncertain

The US Securities and Exchange Commission has approved the first spot Ethereum exchange-traded funds (ETFs). 

Trading for these ETFs began on July 23, 2024. This follows the successful launch of Bitcoin ETFs earlier this year, paving the way for increased institutional investment in Ethereum.

“While it was only a matter of time before the Ethereum ETF got the green light, this latest endorsement by the SEC is undoubtedly a significant moment for the industry and highlights the regulatory body’s changing attitude towards digital assets from outright rejection to reform,” says Philippe Bekhazi, Co-founder and CEO of XBTO.

Philippe Bekhazi, Co-founder and CEO of XBTO

Major financial institutions like Grayscale, Fidelity, Invesco, and Bitwise are set to launch these spot Ethereum ETFs. Unlike futures-based ETFs, spot ETFs directly track the price of Ethereum, offering a more straightforward investment option. This approval is expected to attract substantial inflows, boosting Ethereum’s investment appeal.

“Some are expecting a muted response compared to the Bitcoin ETF,” continues Bekhazi.

However, while Ethereum does have a different risk profile to Bitcoin, the Ethereum ETF could have the potential to become a key investment in any portfolio once the SEC and issuers take time to understand the asset.

"It’s fair to say that everyone will be closely watching the Ethereum ETF and underlying asset to see if it can follow in Bitcoin’s footsteps, breaking new all-time highs. However, it should also be remembered that, historically, market prices have experienced a correction following the initial ETF launch, which could also be expected following this approval."

“We’ve already seen how these assets can unlock a number of new investment possibilities for a much wider audience, including those who may not have previously had access to digital asset investment opportunities," says Bekhazi.

Institutions that have gained exposure to the spot Bitcoin ETF will likely seek to diversify with the Ethereum ETF, as it provides another familiar and comfortable vehicle for crypto investment.

“Not only will this help fuel inflows into the ETF but it marks another significant step forward for institutional adoption of crypto.” 

**************

Make sure you check out the latest edition of FinTech Magazine and also sign up to our global conference series – FinTech LIVE 2024

**************

FinTech Magazine is a BizClik brand.

Share

Featured Articles

What Trump Memecoin Means for the Future of Crypto

What the launch of the $TRUMP and $MELANIA memecoins days before Donald Trump's inauguration mean for cryptocurrency markets

M&A: Fresh Deals Signal Wave of Fintech Consolidation

Recent acquisitions by MoonPay, Chainalysis and Banking Circle point to potential acceleration in M&A activity as sector seeks strategic growth

It's DORA Day. Is Your Organisation Ready?

As nearly half of UK financial firms set to miss today's DORA compliance deadline, industry leaders warn of hefty fines but remain optimistic about a path

Global Fintechs Secure US$165m in Cross-Border Growth Push

Venture Capital

Klarna and Stripe Expand Global Payments Integration

Financial Services (FinServ)

Carbon Credit Market: Poised for Growth by 2030

Sustainability