Crypto Alert: SEC Allows Major Exchanges to List Ethereum ETFs

The global adoption of cryptocurrency will happen step by step, not all at once. However, one of the most important steps occurred this week, as the Securities and Exchange Commission (SEC) effectively paved the way for spot Ethereum exchange-traded funds (ETFs).

It’s the next logical step after the SEC approved spot Bitcoin ETFs earlier this year. However, there was consternation and hand-wringing on social media a few weeks ago because some commentators questioned whether the SEC would actually approve spot Ethereum ETFs this year.

Why does this issue matter so much? It’s not convenient for everybody to keep Bitcoin and Ethereum in a cryptocurrency wallet. ETFs make it easier for some investors to get exposure to these cryptocurrencies in their 401(k)s, IRAs, and pension plans. As a result, ETFs allow for these digital assets to achieve greater mainstream acceptance.

Of course, the SEC isn’t particularly interested in making cryptocurrency more accessible to the public. After all, the government wants to protect and promote government money. Decentralized assets threaten the status quo, so it’s not too surprising that the SEC dragged its feet in approving spot crypto ETFs for a long time.

Naturally, the private sector is more savvy and open-minded about digital assets than the government is. Fund managers like BlackRock, Fidelity, Grayscale, and Franklin Templeton are all seeking the SEC’s full approval for their proposed spot Ethereum ETFs.

However, there are signs that some politicians actually support progress on this front. Notably, a group of members of the U.S. House of Representatives recently urged SEC Chairman Gary Gensler to approve spot Ethereum ETFs.

Courtesy: @MarketProphit

In anticipation of a price rally, the smart money got into Bitcoin before the SEC approved spot Bitcoin ETFs. Now, it looks like smart-money investors are positioning themselves for the inevitable full approval of ETFs for Ethereum.

And in fact, that approval is getting closer now. That’s because the SEC recently allowed the New York Stock Exchange (NYSE) and the NASDAQ to list eight ETFs that hold Ethereum.

Don’t declare victory yet, though. The SEC still hasn’t given its approval to money managers seeking to issue the new Ethereum ETFs. In other words, the SEC needs to approve S-1 forms from these money managers before the ETFs can start trading on the NYSE, NASDAQ, and other exchanges.

Still, just allowing the listing of eight Ethereum ETFs on major exchanges is a huge step forward. I wouldn’t claim that Gensler is suddenly a cryptocurrency fan, but perhaps he’s gradually and reluctantly acknowledging the legitimacy of non-fiat digital assets.

Courtesy: @QuintenFrancois

Or, maybe that’s wishful thinking. I certainly wouldn’t expect a regulatory entity to appreciate the technological and economic benefits of non-government, inflation-resistant forms of money.

If enduring change is going to happen, it must start with the people and then work its way up to Washington. Whether it’s lawmakers on Capitol Hill or Gensler and the SEC, the higher-ups will only listen to the voice of the people if it’s loud and persistent enough.

So, it’s a waiting game at this point. As Nexo co-founder Antoni Trenchev explained, “Ether and crypto enthusiasts now have to sit on their hands as the SEC crosses the t’s and dots the i’s before the spot ETH ETFs can actually launch.”

It’s frustrating, but that’s how it goes as the wheels of the government always turn slowly. Yet, smart-money investors don’t have to sit on their hands right now, as the Ethereum price is likely to make a move when the SEC finally makes a decision and opens the floodgates for the proposed ETFs.