BTC ETFs have been operating on the market since the beginning of the year. It is possible that the US authorities will allow the creation of ETH funds as early as May. But is this certain? We asked Sebastian Seliga from zondacrypto about it.
ETH ETF
Let's start with the dates. These are the deadlines for making final decisions on the approval of ETH ETFs:
- VanEck ETF – May 23, 2024,
- ARK 21Shares ETF – May 24, 2024,
- Hashdex Nasdaq ETF – May 30, 2024,
- Grayscale Trust – 18/06/2024,
- Invesco Galaxy ETF – July 6, 2024,
- iShares Trust – July 26, 2024.
These dates represent important milestones in the approval process for ETH ETFs and have a significant impact on investment strategies and overall market sentiment towards ETH and the broader cryptocurrency ecosystem
– explains Selig.
Prospects and Implications of the SEC's Decision
As the zondacrypto expert continues in his interview with us, “The SEC (Securities and Exchange Commission) plays a key role in this process. The fact that the SEC does not classify ether as a security can be interpreted as a positive sign for future ETFs based on this cryptocurrency. This classification distinguishes ETH from other cryptocurrency projects that may face regulatory difficulties.”
Grayscale, as one of the leading cryptocurrency investment firms, may encounter resistance from the SEC in its bid to convert its Ethereum trust fund into an ETF. However, the argument that the SEC may approve Grayscale's application to avoid appeals is relevant. Such appeals could complicate the SEC's efforts to keep the market stable and predictable.
On the other hand, some opinions suggest that the SEC may delay the approval of an ETH ETF to preserve its reputation and avoid perceived risks. This cautious approach may result from a desire to avoid negative consequences for financial markets, especially in light of the growing role of cryptocurrencies
– he adds.
The problem is that “awaiting SEC decisions regarding various Ether ETF applications creates an atmosphere of uncertainty, but also hope. Approval of any of these proposals could open Ethereum to an entirely new class of investors, potentially increasing liquidity, price stability, and overall acceptance of ETH as an investment asset. Regardless, the variety of decision dates and time spans between individual applications highlight the complexity of the regulatory process and the multitude of strategies undertaken by funds seeking approval.”
Conclusions
So what should investors do? Seliga says they will simply “follow developments, preparing for different scenarios.”
Approval of the ETH ETF by the SEC would not only increase ether's legitimacy as an investment asset, but could also serve as a catalyst for broader acceptance of cryptocurrencies in traditional financial sectors
However, as experience shows, regulatory outcomes are often surprising, underscoring the importance of maintaining a balanced and well-reasoned strategy regardless of developments regarding ETH ETFs
– sums up.
