BlackRock, Fidelity and six other firms receive SEC approval for Ethereum ETFs – Business
In a surprise decision, the U.S. Securities and Exchange Commission announced today that it had approved eight applications for spot Ethereum exchange-traded funds.
The SEC approved 19b-4 forms – submissions made to the SEC seeking approval to list and trade a new ETF, detailing the proposed rule changes and regulatory compliance. The eight submissions approved cover ETFs from BlackRock Inc., Fidelity, Grayscale Investments Inc., Bitwise Asset Management Inc., VanEck Associates Corp., Ark Investment Management LLC, Invesco Capital Management LLC and Franklin Templeton.
While the SEC has greenlighted the 19b-4 submissions, the companies seeking to list ETFs are still required to file S-1 forms. An S-1 registration statement is a filing used by companies – in this case, the ETF providers – planning to go public that details essential information about the offering’s financials and business operations for potential investors.
With the S-1 forms still required, exactly how long it will take for the ETFs to be listed is open to speculation. However, James Seyffart, an analyst at Bloomberg, writes on X Inc. that with extremely hard work, the process could be completed within a couple of weeks, although there are examples of the process taking over three months historically.
Ethereum ETFs are a type of investment fund that tracks the price of Ethereum and is traded on traditional stock exchanges rather than cryptocurrency exchanges, allowing investors to invest in Ethereum without holding actual cryptocurrency. An Ethereum ETF represents shares in a fund that has Ethereum as its primary asset, with investment values rising and falling in tandem with the changes in the price of Ethereum.
The decision by the SEC comes after it gave approval to similar ETFs for bitcoin in January. As with Ethereum ETFs, bitcoin ETFs also struggled to get approval, with the SEC having cited arguments that cryptocurrency markets are vulnerable to market manipulation.
The SEC is approving the Ethereum ETFs now, citing improved market regulation that can help detect and deter fraudulent and manipulative acts. The SEC also said that recent court decisions and improved correlation analysis between spot and futures markets for cryptocurrencies like bitcoin influenced their decision.
The SEC did note in its ruling, however, that it remains important to address investor protection concerns, such as premium/discount volatility and high management fees associated with other investment vehicles, by providing a more stable and cost-effective option through these ETFs.