The price of ether (ETH) saw a substantial rise of over 20% on Tuesday, before retracting some of those gains. This surge in price appears tied to heightened optimism surrounding the potential approval of a spot ether exchange-traded fund (ETF). As the U.S. Securities and Exchange Commission (SEC) asked exchanges to update related filings, the crypto market’s sentiment toward spot ether ETF approval became more positive.
Renewed Optimism for Spot Ether ETFs
Recent developments indicate a shift in the SEC’s handling of ether ETF applications. The SEC’s request for various exchanges to update their 19b-4 filings on an accelerated timeline mirrors steps previously taken during the bitcoin ETF approval process. This request suggests that the SEC might be moving closer to approving a spot ether ETF.
Adding to this optimism, Fidelity removed staking rewards from its ether ETF application. This move addresses the SEC’s concerns about staking being a securities offering. Previously, the SEC has taken legal action against exchanges like Binance, Coinbase, and Kraken over staking services. By removing staking from its application, Fidelity aims to ease regulatory concerns and boost the chances of approval for its ether ETF.
Market Reactions and Analyst Predictions
The market response to these developments has been significant. On Monday, Bloomberg analyst Eric Balchunas increased the approval odds for the 19b-4 filings from 25% to 75%. Similarly, the prediction market Polymarket saw the odds of a spot ether ETF approval jump from 10% to 60% in just one day.
This surge in approval odds reflects the growing confidence among investors and analysts. The changes made by Fidelity and the SEC’s actions indicate that a spot ether ETF might soon become a reality. However, final approval and market entry still require navigating through additional regulatory steps.
The Road Ahead for Spot Ether ETFs
Despite the positive signs, the approval of a spot ether ETF may not happen immediately. Bloomberg analyst James Seyffart noted that the SEC has a Thursday deadline to decide on VanEck’s 19b-4 filing. Even if this filing is approved, it could take weeks or months for the necessary S-1 initial registration filings to be approved and for the first spot ether ETF to launch.
Nonetheless, progress is being made. Scott Johnsson, General Partner at Van Buren Capital, highlighted that the removal of staking from the application was anticipated. More importantly, there have been no changes to the commodity grantor trust structure and disclosures. This suggests that the SEC might be softening its stance on ether as a security, paving the way for future approvals.
In conclusion, while the road to spot ether ETF approval is still fraught with regulatory hurdles, the recent developments bring renewed hope and optimism to the market. The SEC’s actions and Fidelity’s adjustments indicate a positive trend that could eventually lead to the approval of spot ether ETFs, providing new investment opportunities in the crypto market.
Original article: “Ether Rallies as Market Gets Optimistic About Ether ETF Approval” https://www.investopedia.com/ether-rallies-as-market-gets-optimistic-about-ether-etf-approval-8651614
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