The SEC has given its approval for Form 19b-4 to be used by eight Ethereum ETF issuers, including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. This approval opens the door for institutional investment in Ethereum, but it should be noted that the S-1 registration statements are still pending.
The recent approval of Form 19b-4 by the U.S. Securities and Exchange Commission (SEC) has caused quite a stir in the cryptocurrency world. This approval allows eight Ethereum exchange-traded fund (ETF) issuers, namely BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton, to move forward with their plans for Ethereum ETFs.
While there is speculation about whether XRP will be the next cryptocurrency to receive approval for ETFs, it is important to note that the ETF issuers must first ensure that their S-1 registration statements are effective before trading can begin. Bloomberg analyst James Seyffart estimates that this process could take a few weeks to complete.
The SEC’s approval of these proposals was done on an accelerated basis and covers trusts that will hold spot ether, either wholly or partially. The SEC determined that these proposals are consistent with the Exchange Act and its regulations, particularly Section 6(b)(5), which aims to prevent fraudulent and manipulative acts and protect investors and the public interest. Additionally, the proposals align with Section 11A(a)(1)(C)(iii) of the Exchange Act, which ensures the availability of information regarding securities transactions.
The SEC has previously stated that exchanges listing bitcoin-based ETFs can meet their obligations through comprehensive surveillance-sharing agreements with regulated markets that have significant size related to the underlying assets. While spot ether does not trade on the Chicago Mercantile Exchange (CME), the exchanges involved in these proposals have such agreements through their membership in the Intermarket Surveillance Group. This allows for the sharing of information available through CME’s surveillance of its markets, including ether futures. The SEC concluded that these agreements are sufficient to prevent fraud and manipulation, despite the fact that spot ether does not trade on the CME.
The crypto community has reacted positively to the SEC’s approval, with many seeing it as a potential catalyst for increased liquidity and stability in the Ethereum market. Ripple CEO Brad Garlinghouse even hinted at the possibility of XRP becoming the next crypto ETF following the approval of Ethereum spot ETFs. He emphasized the significance of the SEC’s approval and the passing of the FIT21 crypto bill, describing these events as momentous for the industry.
Market analysts have also weighed in on the approval of Ethereum spot ETFs, offering optimistic forecasts for Ethereum’s price. One analyst, Miles Deutscher, predicts that if the ETFs receive final approval, Ethereum’s price could surge to $6,446 by July, drawing parallels to Bitcoin’s historical performance post-ETF approval. Deutscher expects a similar trajectory for Ethereum, projecting a 75.17% increase in value. Standard Chartered analysts predict significant inflows into Ethereum, estimating between $15 billion and $45 billion within the first 12 months of ETF approval. They suggest that Ethereum prices could reach $8,000 by the end of 2024, driven by these inflows and broader market trends.
As of now, Ethereum (ETH) is priced at $3,654, with a 24-hour trading volume of $40,730,127,309. This represents a 4.29% decline in price over the past 24 hours but a 23.37% increase over the past week. It should be noted that the highest price ever recorded for Ethereum was $4,878.26 on November 10, 2021, which is 24.73% higher than the current price.
Disclaimer: This article is meant for informational purposes only and should not be considered financial advice. The views expressed in this article are the author’s personal opinions and do not necessarily reflect the opinions of The Crypto Basic. Readers are advised to conduct their own research before making any investment decisions. The Crypto Basic is not responsible for any financial losses incurred.