US regulators have officially approved spot exchange-traded funds (ETFs) holding Ethereum's Ether (ETH), granting American investors a new way to trade the second-largest cryptocurrency. This marks the culmination of a lengthy effort to gain approval from the Securities and Exchange Commission (SEC), following the approval of bitcoin (BTC) ETFs earlier this year.
The introduction of Ether ETFs aims to make cryptocurrency investments more accessible to traditional investors by allowing them to buy and sell these funds through conventional brokerage accounts. Bitcoin ETFs, launched in January, have already attracted tens of billions of dollars in investments.
Binance CEO Richard Teng said, “The upcoming launch of ETH spot ETF trading in the US marks yet another significant milestone for Ethereum and the broader digital asset market. This development builds on the positive momentum we have witnessed in the digital asset market this year, further solidifying the legitimacy and accessibility of cryptocurrencies.
"While we anticipate a steady capital deployment into these ETFs, it is unlikely to be dramatic initially and will fluctuate based on various macroeconomic factors. However, I believe that the potential for ETF liquidity to grow exponentially is significant. With SEC approval and listing, these ETFs can now be invested in by institutions, which typically have a long-term investment horizon. This institutional involvement could provide a stable and substantial influx of capital over time," Teng added.
“The Securities and Exchange Commission today approved the listing of multiple spot Ethereum exchange-traded funds, ending a more than eight-month process. ETH ETF is expected to be listed today at US market open," said Pankaj Balani, CEO & Co-Founder, Delta Exchange. "This is a watershed moment for crypto after the listing of BTC ETFs in Jan this year. This also puts away all the concerns regarding ETH being a security and opens the door for ETFs for other staking chains such as Solana."
“The crypto industry has shown remarkable resilience and growth since 2022. The recent approval of Spot Ethereum ETFs trading in the US is a landmark win for the crypto industry and for the democratisation of finance and technology," said Raj Karkara, COO, ZebPay.
Approval for Ether ETFs was uncertain until recently. However, in late May, SEC officials began engaging with potential ETF issuers after a prolonged silence. On May 23, a crucial filing was approved, paving the way for the final authorisation of these funds.
ALSO READ: Bitcoin ETFs: Why Secure Custody Is The Cornerstone Of Trust For These Investment Funds
ETH Price Boost?
As per Coindesk, analysts suggest that while a spot ETH ETF might boost Ether's price to $6,500, the inflows into these funds may not reach the levels seen with bitcoin ETFs. Currently, the price of ETH stands at approximately $3,430, according to CoinMarketCap.
This decision signifies a significant milestone in the cryptocurrency market, providing investors with new opportunities to engage with digital assets through established financial instruments.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.