SEC Approves Spot Ethereum ETFs from Major Firms Including BlackRock and Fidelity, Opening New Investment Avenues
The United States Securities and Exchange Commission (SEC) has officially approved the listing of spot Ethereum ETFs, signaling a significant move in the cryptocurrency investment landscape. This approval covers applications for ETFs from major financial entities such as BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton, marking a notable advancement for digital asset management.
On May 23, 2024, the SEC greenlighted the Form 19b-4 filings from issuers aspiring to launch these spot Ethereum ETFs. This development was reported by The Block, highlighting the diverse range of firms stepping into the Ethereum-based ETF market. Prior to this approval, James Seyffart, an analyst at Bloomberg Intelligence, published a comprehensive list of the ETF filings, providing keen insights into the potential shift in the investment paradigm surrounding Ethereum.
However, Seyffart cautioned that the approval of the Form 19b-4 is just the initial step in a longer regulatory process. "This is only the approval of the 19b-4 forms. The S-1 documents also need to be approved, which will take some time," he explained. Seyffart anticipates that it could be a few weeks or even longer before these ETFs are actively traded on the market, suggesting that more details will emerge within the next week.
Despite the positive regulatory development, the price of Ethereum (ETH) showed minimal reaction to the news. At the time of the announcement, Ethereum was trading at approximately $3780, according to data from TradingView. This muted response is in contrast to the market’s reaction to previous ETF approvals, such as the spot Bitcoin ETFs approved by the SEC on January 10, 2024. Following that approval, the Bitcoin ETFs hit the stock market the very next day, with trading volumes reaching $4.66 billion and a net daily capital inflow of $628 million, as reported by SoSo Value.
Eric Balchunas, another analyst at Bloomberg Intelligence, previously predicted that the capital share of spot Ethereum ETFs might constitute about 10% of the volumes seen in Bitcoin funds at launch in Hong Kong. This forecast offers an insight into the potential market dynamics and investor interest in Ethereum-based ETFs in the U.S.
This approval by the SEC does not mean that the new funds will start trading immediately but lays the groundwork for a new chapter in cryptocurrency investments, especially for institutional investors looking to diversify their portfolios with digital assets under a regulated framework. The entry of established financial giants into the Ethereum ETF market is a strong endorsement of the growing legitimacy and acceptance of cryptocurrencies in mainstream financial services.