The US Securities and Exchange Commission (SEC) has approved rule changes to facilitate the launch of eight exchange-traded funds (ETFs) focused on Ethereum. This development represents a significant advancement for the cryptocurrency community and paves the way for notable platforms such as BlackRock, Fidelity, Invesco, and Art Invest to roll out ETFs that invest in ether, the cryptocurrency associated with the Ethereum blockchain.
However, a second round of approvals is necessary for the motion to proceed officially. This approval does not guarantee full implementation of the rule changes, as SEC Chair Gary Gensler has previously mentioned concerns regarding ongoing fraud in the sector. He noted, “It comes down to the rampant non-compliance with US law. It comes down to fraud and scams. This is a field where some of the leading lights of the field are either now in jail or awaiting jail, awaiting extradition.”
Earlier this year, the SEC also gave the green light to 11 bitcoin spot ETFs.
Alex Saleh, head of partnerships at Coincover, remarked, “The SEC’s move is another sign of the growing appetite for crypto ETFs and could introduce fresh demand pressure on Ethereum spot prices, since exposure to Ethereum would be opened to a wider pool of investors. This is an exciting moment for the crypto community, but there are still risks that come with any new financial instrument. Volatility is a given, and widespread adoption of Ethereum ETFs would lead to fund managers accumulating large amounts of Ethereum across various custody methods. This accumulation will be a prime target for hacks, attacks, and potential human error. We expect greater vigilance around risk mitigation and security capabilities, meaning security must be a top priority for ETF managers.”