Signs of SEC Movement
The US Securities & Exchange Commission (SEC) has been in contact with at least one exchange and one potential spot-Ether ETF issuer. They were asked to update related 19b-4 filings, according to sources who requested anonymity. This development suggests that the chances of SEC approval may be improving, though approval is not guaranteed.
ETF Approval Process
For an ETF to launch, issuers must submit 19b-4 filings and obtain SEC approval for S-1 registration statements. A decision on at least one spot-Ether ETF application is expected by May 23. The SEC has not commented on individual filings.
Market Reaction and Speculation
Social media is abuzz with speculation about the potential approval. Chris Newhouse, an analyst at Cumberland Labs, noted that traders are scrambling to position themselves in anticipation of approval, as many had previously dismissed the possibility.
Importance of Ether
Ether is the native token of the Ethereum blockchain, a crucial platform for decentralized financial services. The Ethereum network allows investors to trade, borrow, and lend via automated protocols rather than traditional intermediaries.
Increasing Approval Odds
On Monday, Bloomberg Intelligence ETF analyst Eric Balchunas and his colleague James Seyffart increased their estimated probability of spot-Ether ETF approval from 25% to 75%.
Some fund companies had anticipated rejection due to less robust private discussions with the SEC compared to those for spot-Bitcoin ETFs. This information came from sources who wished to remain anonymous.
Caution Among Investors
Despite the optimism, some investors remain cautious. Ravi Doshi, head of markets at FalconX, observed that many counterparties on their derivatives desk are skeptical, expecting the SEC to move more slowly than the market anticipates.
Background on Bitcoin ETFs
The SEC has been hesitant about crypto, but it approved US spot-Bitcoin ETFs earlier this year following a court reversal in 2023. These products, from firms like BlackRock Inc. and Fidelity Investments, have accumulated $58.8 billion in assets, making them one of the most successful fund categories.
Ether ETF Applications
BlackRock and Fidelity are also seeking to launch Ether funds. The digital asset industry views ETFs as a means to expand crypto’s investor base. Bitcoin ETFs have already attracted investments from retail investors, hedge funds, pension funds, and banks.
Notable buyers include Millennium Management, Steven Cohen’s Point72 Asset Management, and Elliott Investment Management.
This comprehensive overview highlights the current optimism and underlying caution in the crypto market as investors await SEC decisions on Ether ETFs.