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Inside the Launch: The Making and Impact of ETH ETF

2024-05-23 08:43:56

May 2024 saw a rise in debate around the approval of Ethereum's spot ETFs by the US Securities and Exchange Commission or SEC. This came after the SEC commanded ETH ETF filers to amend their 19B-4 filings for a resubmission, raising speculation that it might have plans to finally approve them on May 23, 2024.

The notable investment managing giants that filed for the ETH ETF approval include BlackRock, Grayscale, Bitwise, Invesco & Galaxy, Fidelity, VanEck, and 21Shares & ARK. In fact, VanEck's ETF has even been listed on DTCC, a US-based financial market infrastructure corp. However, the ETF is currently designated as inactive.

Now, what's the backstory of Ether ETFs, and why are they gaining momentum in 2024? Can this impact the crypto market in the coming days or months? Would the impact be positive or negative? Let's find answers to these burning questions and many more today.

What are ETH ETFs, and How Did They Come Into the Spotlight?

Ethereum ETFs are the exchange-traded funds offered by investment and financial management companies via brokerage platforms as well as stock exchanges. Last year, we saw a rise in the popularity of Bitcoin spot ETFs, which also sparked Ethereum lovers' interest in ETH spot ETFs.

As a result, many financial market players went to the SEC with their proposals for ETH ETFs. It started with Grayscale's proposal to the SEC to convert its Ethereum Trust into an ETF. Later, many other giants joined the race to get their ETH spot ETFs approved, though none has yet been.

Is the SEC Going to Approve ETH ETFs?

The recent stance of the SEC over the ETFs has changed significantly, especially in the last few weeks. Many claim it to be linked with the White House, as the Biden Administration is seeing an end to its presidential tenure.

According to a report, the SEC officials have instructed three popular US exchanges, including Nasdaq, to revisit their ETF applications. Approving the 19B-4 forms will enable the exchanges to offer ETH ETFs for trading.

As the deadline for the SEC to respond to the ETH spot ETF applications finally arrives, crypto investors and traditional finance managers are hopeful that this might end their waiting.

At the same time, crypto bulls are enthusiastic about a pump in the market, especially Ethereum, if the SEC approves these ETFs. If they do get approved, Ethereum can see a significant stride in price in the short term, and bulls are aware of that.

The following data from CryptoQuant shows that crypto traders have flooded exchanges with almost $231 million in hopes of approval. These inflows are the highest since March 2024.

On the contrary, the market can also see a considerable correction if the SEC denies to approve ETH ETFs. Nonetheless, a period of volatility is definitely expected for at least a week following the SEC's decision on the fate of spot Ether ETFs.

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