In a groundbreaking development within the cryptocurrency industry, there has been a significant increase in the likelihood of the United States Securities and Exchange Commission (SEC) approving an ETF for Ethereum. Eric Balchunas, a senior analyst at Bloomberg, has recently raised the odds of approval from 25% to 75%, hinting that political influences may be swaying the SEC’s stance on the matter.
Previously, the SEC had maintained a cautious approach towards ETF applicants in the crypto space, showing minimal engagement with such financial products. However, recent reports suggest a shift in this approach as the SEC is now requesting exchanges like the New York Stock Exchange (NYSE) and Nasdaq to update their filings. Although there has been no official confirmation from the SEC, this move has sparked speculation within the financial community.
Nate Geraci, co-founder of the ETF Institute and president of the ETF Store, highlighted that the decision on the registration requirement for individual funds remains pending. He pointed out that the SEC could approve exchange rule changes separately from the fund’s registration, potentially delaying the process beyond the upcoming deadline for VanEck’s Ethereum spot ETF request on May 23.
The complexities surrounding proof-of-stake (PoS) cryptocurrencies further complicate the SEC’s decision-making process. Alex Thorn, Head of Research at Galaxy, speculated on how the SEC might navigate this regulatory landscape, particularly in differentiating between Ethereum (ETH) and staked ETH. This approach could align with the SEC’s previous positions on securities, potentially paving the way for Ethereum ETF approval.
Renowned cryptocurrency lawyer Jake Chervinsky weighed in on the potential implications of an approved spot ETH ETF, noting that it would be a surprising development to those closely involved in the process. He suggested that this approval could signify a notable shift in US crypto policy, potentially more impactful than the ETF itself.
Overall, the approval of an Ethereum spot ETF could signify a pivotal moment in US cryptocurrency regulation, signaling a broader acceptance and integration of digital assets into mainstream financial markets. This move could potentially reshape the landscape of US crypto policy and provide a new level of legitimacy to cryptocurrencies.