The US markets regulator Securities and Exchange Commission (SEC) on Thursday confirmed that it has approved applications from Nasdaq, CBOE and NYSE to enable exchange traded funds holding Ethereum’s native token, ETH.
It is vital to note that they are yet not cleared to trade but a step has been taken in that direction.
Interestingly, SEC’s green signal appeared unlikely only a few days ago. One ETF analyst James Seyffart at Bloomberg Intelligence said, “A week ago, I would’ve said you were a little crazy to think that these ETFs were going to get SEC approval.”
There are speculations that ETF approval could lead to 60 percent rally as ETH buying increases. This is seen in the backdrop of spike in bitcoin prices two weeks after the ETF started trading on January 11.
Bitcoin rose to over $73,000 from $42,000 in the two weeks after the ETFs started trading on Jan. 11, reported CoinDesk quoting CoinGecko data.
Now, cryptocurrency traders seem to be getting more exposure to ETH in comparison to bitcoin.
Besides, CryptoQuant reported that there is a wild volatility ahead because investors sent 62,000 ETH to exchanges. “High exchange flows are typically associated with price volatility,” it said.
The Ether’s dip below $3,800 on Thursday was reportedly seen as an after-effect of sell-off by Symbolic Capital Partners, which sold 6,968 ETH in one minute worth $27.38 million, shared Wu Blockchain on X platform.
“The introduction of spot bitcoin ETFs has already demonstrated significant benefits for the digital assets and ETF space, and we believe that spot ether ETFs will similarly provide safeguards for U.S. investors,” said Rob Marrocco, global head of ETP listings at Cboe Global Markets, reported Reuters.
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The SEC rejected spot bitcoin ETFs for more than a decade over market manipulation worries but was forced to approve them after Grayscale Investments won a court challenge last year.
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Published: 25 May 2024, 02:45 PM IST