The U.S. Securities and Exchange Commission (SEC) has unexpectedly approved the launch of spot Ethereum ETFs, marking a notable shift in its previous position. This decision involves the acceptance of 19b-4 filings from several prominent issuers, including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton.
This approval follows the SEC's earlier decision in January 2024 to allow spot Bitcoin ETFs. While there was speculation about Ethereum ETFs receiving approval, the SEC had remained silent until this week. Starting on Monday, the SEC began actively engaging with issuers, instructing them to submit revised filings.
Despite the approval of the 19b-4 forms, ETF issuers must still have their S-1 registration statements become effective before trading can commence. This additional step could take anywhere from a few weeks to several months.
The SEC's decision is viewed as a significant win for the cryptocurrency sector. Following the announcement, Ethereum's price increased by nearly 2%. However, analysts predict that Ethereum ETFs might initially attract fewer assets compared to Bitcoin ETFs, with an estimated $5-8 billion in inflows versus Bitcoin's $14 billion.
The approval comes amidst ongoing debates over whether Ethereum should be classified as a security and concerns about staking. In response, ETF issuers have removed staking from their applications to address these issues.