VanEck, BlackRock and 8 Asset Management Firms' Applications Approved
"A Very Exciting Moment for the Cryptocurrency Industry"
"Up to 61.5 Trillion Won Expected to Flow In"
The path has opened for the trading of a spot exchange-traded fund (ETF) for Ethereum, the second-largest cryptocurrency by market capitalization. This is the first time for a cryptocurrency other than Bitcoin.
According to CNBC and others on the 23rd (local time), the U.S. Securities and Exchange Commission (SEC) approved the spot ETF listing application (Form 19B-4) submitted by eight asset management firms, including VanEck. This comes about four months after the approval of the Bitcoin spot ETF in January, marking a significant milestone as the first for altcoins (cryptocurrencies other than Bitcoin).
The SEC stated on the day, "After careful review, the Commission has determined that this application complies with the Securities Exchange Act and the related rules and regulations applicable to U.S. securities exchanges." The decision deadline for VanEck's Ethereum spot ETF application was that day. Other applicants included BlackRock, Fidelity, Grayscale, Bitwise, Ark·21Shares, Invesco·Galaxy, and Franklin Templeton.
CoinDesk, a cryptocurrency-focused media outlet, evaluated this approval as "meaning the SEC will allow the launch of the Ethereum spot ETF market alongside the Bitcoin spot ETF." Andrew Jacobson, Vice President and General Counsel of 21Shares, described it as "a very exciting moment across the (cryptocurrency) industry" and "an important step" for (cryptocurrency spot ETF trading).
This approval of the Ethereum spot ETF by U.S. regulators is also seen as a significant milestone for the digital asset industry. Until just a few days ago, the outlook for Ethereum spot ETF approval was not optimistic. Gary Gensler, SEC Chairman known for his critical stance on the cryptocurrency market, has argued that coins other than Bitcoin should be considered securities and subjected to stringent regulations.
Earlier, Bloomberg reported on the 19th that there was almost no private dialogue between Ethereum ETF applicants and the SEC compared to the past Bitcoin ETF approval process, and that the applicant companies were preparing themselves mentally. However, later, Eric Balchunas, an ETF analyst at Bloomberg Intelligence, hinted at a turnaround by tweeting on his X (formerly Twitter) account, "I heard the SEC could do a 180 on this issue."
In fact, the possibility of ETF approval gained more weight when the SEC requested asset management firms such as VanEck, who applied for the Ethereum spot ETF, to amend their securities applications on the 21st. Major foreign media reported, "The reason for the SEC's sudden change of heart is unknown," and "The SEC spokesperson refrained from further comments in the email announcing the ETF approval."
The market expects that once Ethereum spot ETF trading officially begins, billions of dollars will flow in. Jeff Kendrick, Head of Digital Asset Research at Standard Chartered, forecasted, "Between $15 billion and up to $45 billion (about 61.5 trillion KRW) will enter the market in the first 12 months." According to market research firm FactSet, the net inflow for the Bitcoin spot ETF has surpassed $12 billion (approximately 16 trillion KRW).
Meanwhile, according to the global cryptocurrency market tracking site CoinMarketCap, as of 8:50 a.m. Korean time, Ethereum was trading at $3,756.24, up 0.36% from the previous day. Bitcoin, which had fallen to the $66,000 level earlier that day, approached the $68,000 level following the Ethereum ETF approval.
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