Is political influence affecting the consideration of spot Ether ETFs by the SEC, and what does this mean for the crypto community?
Overview
The price of Ethereum (ETH) has been steadily rising, reaching around $3,760 as of May 22, climbing 28% in the past week. This surge is fueled by speculation that the U.S. Securities and Exchange Commission (SEC) may greenlight the first spot Ether exchange-traded funds (ETFs) this week.
Recent Developments
In a surprising move, the SEC has asked Nasdaq, CBOE, and NYSE to refine their applications for listing spot Ether ETFs by the end of Tuesday. Following this request, ETF issuers such as Fidelity, VanEck, and ARK/21Shares swiftly submitted their amended filings, known as Form 19b-4, to the SEC for review.
Impact on Ether
This news caused the price of Ether to surge, with a peak increase of 18% on Monday, reaching over $3,830 before stabilizing around $3,700. Deadlines for the first round of spot Ether ETF applications are approaching, with VanEck’s due on May 23 and ARK Invest/21Shares’ on May 24.
Implications and Uncertainty
The approval of these ETFs would be a significant victory for the crypto industry. However, there is still uncertainty as the SEC, led by crypto skeptic Gary Gensler, has been cautious about approving spot crypto ETFs due to concerns about market manipulation. The recent court ruling in favor of Grayscale Investments for spot Bitcoin ETFs may influence the decision on Ether ETFs.
Approval Process
In addition to the 19b-4 filing, ETF issuers need S-1 approvals from the SEC, which can take weeks to months. Once approved, the ETFs can go live and be traded on the market, indicating a potential delay in the launch of a live Ethereum ETF.
Political Influence
Speculation suggests that political pressure could be influencing the SEC’s stance on Ether ETFs, possibly due to upcoming elections. Former President Donald Trump’s support for crypto and criticism of President Joe Biden’s understanding of crypto may have an impact on the decision-making process.
Market Impact
The potential approval of spot ETH ETFs could impact BTC ETFs and the broader altcoin market. While BTC ETFs have amassed significant assets under management, ETH ETFs may struggle to match their initial impact but could still capture a portion of the market share.
What’s Next?
As speculation grows around the approval of a spot ETH ETF, VanEck’s ETF has been listed by the DTCC under the ticker symbol “ETHV,” a crucial step before final approval from the SEC. If approved, ETH could potentially keep pace with Bitcoin, with projections suggesting a positive outlook for the crypto market in the coming years. However, caution is advised due to the volatile nature of the market and regulatory uncertainties.