Ethereum ETFs Gain Approval from SEC, Establishing Ethereum as a Non-Security
The U.S. Securities and Exchange Commission (SEC) has approved several Ethereum exchange-traded funds (ETFs), marking an official recognition of Ethereum as a non-security, according to Brian Quintenz, former CFTC Chairman and Head of Policy at a16z Crypto.
On October 2, nine ETF products were launched, designed to track futures contracts tied to the value of Ethereum’s native currency, Ether. Five of these ETFs exclusively hold Ether futures, while the remaining four track a combination of Bitcoin and Ethereum futures contracts.
Grayscale is also planning to convert its Ethereum Trust into a spot Ethereum ETF.
Ethereum ETFs Experience Modest Trading Volume on Day 1
Among the newly launched ETFs, Valkyrie’s BTF led the way with a total trading volume of $882,000. BTF had previously traded as a Bitcoin-only futures ETF but adjusted its strategy to include Ethereum.
Compared to the debut of the ProShares Bitcoin Strategy ETF (BITO) in October 2021, the initial trading volume for these Ether ETFs was relatively low. BITO witnessed over $1 billion in trading volume on its first day.
Although the trading volume for Ether ETFs may seem modest, it is significant compared to traditional finance ETF launches. Investors generally prefer spot ETF products over those based on futures contracts.
Volatility Shares Abandons Plan for ETH Futures ETF
Despite the growing interest in Ether futures and ETFs, some firms are cautious about entering this market. Volatility Shares recently canceled its plans to list a similar product due to a lack of opportunities in the current environment.
Significance of Ethereum ETF Approvals
The approval of Ethereum ETFs by the SEC is a significant regulatory development for the cryptocurrency market. It solidifies Ethereum’s status as a non-security and highlights the future potential of the internet.
“It’s ridiculous and insulting that it took so long to get here, but it’s a big win for the crypto space, and more importantly for the future of the internet,” said Brian Quintenz, former CFTC chairman.
Hot Take: Ethereum ETFs Gain SEC Approval, Paving the Way for Future Growth
The recent approval of Ethereum exchange-traded funds (ETFs) by the SEC is a major milestone for Ethereum and the broader cryptocurrency industry. By recognizing Ethereum as a non-security, the SEC has provided greater clarity and legitimacy to the asset. Despite modest trading volumes on their first day, these ETFs represent an important step in making Ethereum more accessible to mainstream investors. While some firms remain cautious about entering this market, the approval of these ETFs signals a growing acceptance of cryptocurrencies by regulators. This development opens up new opportunities for investors and further establishes Ethereum’s role as a key player in the digital economy.
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