Eight applications for Ethereum ETFs were authorized by the US Securities and Exchange Commission (SEC) on Thursday through a collective decision, indicating the increasing acceptability of cryptocurrencies in traditional finance.
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Approvals of Ethereum ETF following a last-minute rush
The 19b-4 forms that were submitted by major financial institutions like VanEck, Bitwise, Fidelity, BlackRock, Invesco Galaxy, and Franklin Templeton have been accepted by the SEC. ETF issuers have overcome the first obstacle, but they still have to make sure that their S-1 registration statements take effect before trading can start.
The SEC has started talking to issuers about these S-1 forms, but it's unclear when this will happen exactly—some analysts predict it will happen in a few weeks, while others cite longer periods of time than three months.
Many market observers are surprised by the SEC's decision. Little hint of upcoming approvals has come from the regulator's previous dealings with ETF issuers, which has raised questions about what caused this abrupt change. According to some reports, the SEC has been under bipartisan pressure recently from members of the House of Representatives to regulate Ethereum ETFs in the same way that it treated Bitcoin spot ETFs.
Notable market reactions have already been triggered by the unexpected move. As it gets closer to becoming an ETF, the Grayscale Ethereum Trust, for instance, has seen a decrease in its discount from 24% to 6%. Holders will be able to trade shares for the underlying Ether's equivalent cash value during the conversion.
Ethereum ETFs may not draw as much investor interest as Bitcoin ETFs, which have seen massive inflows since their approval, amassing an extra 207,000 Bitcoins ($14 billion) on top of the 621,000 Bitcoins ($42 billion) that the Grayscale Bitcoin Trust already owned prior to the conversion.
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