The cryptocurrency sector has reached a major regulatory milestone as the U.S. Securities and Exchange Commission (SEC) unexpectedly approved crucial 19b-4 filings for spot ether exchange-traded funds (ETFs). This decision marks a significant shift in the SEC’s approach to engaging with ether ETF issuers.
The SEC granted accelerated approval for the 19b-4 filings, allowing various spot ether products to be listed on different exchanges. The NYSE Arca obtained permission for the Grayscale Ethereum Trust and the Bitwise Ethereum ETF, while Nasdaq can now list the Ishares Ethereum Trust, and BZX can list the Vaneck Ethereum Trust, the ARK 21shares Ethereum ETF, the Invesco Galaxy Ethereum ETF, the Fidelity Ethereum Fund, and the Franklin Ethereum ETF. The SEC clarified that these proposals align with the regulations applicable to a national securities exchange.
The approval came as a surprise to many, as there had been little expectation of the SEC approving ether ETF filings. James Seyffart, an ETF analyst at Bloomberg Intelligence, expressed his surprise, stating, “A week ago, I would’ve said you were a little crazy to think that these ETFs were going to get SEC approval.” Seyffart shared images on X that demonstrated the change in sentiment over the course of a week.
While the 19b-4 approval indicates regulators’ willingness to allow spot ether ETFs, it does not guarantee that the final S-1 forms will be approved for all issuers. Moreover, although this approval paves the way for these firms to list and trade spot ether ETFs, the funds are not yet cleared for trading. The SEC still needs to approve their S-1 registration statements before investors can purchase the ETFs.
Seyffart cautioned that the approval does not mean immediate trading, stating, “This does not mean they will begin trading tomorrow. This is just 19b-4 approval. Also needs to be an approval on the S-1 documents which is going to take time. We’re expecting it to take a couple weeks but could take longer. Should know more within a week or so!”
Vaneck anticipates being the first issuer to launch its spot ether ETF, with Matthew Sigel, the company’s head of digital assets research, stating, “We filed first, we should list first.”
Grayscale expressed optimism about the development, with a spokesperson stating, “At Grayscale, we appreciate the opportunity to engage constructively with regulators as they review spot ethereum ETFs, and we remain optimistic about the potential of bringing ethereum further into the U.S. regulatory perimeter in the ETF wrapper.”
Since May 17, the discount of the Grayscale Ethereum Trust (ETHE) to its net asset value (NAV) has decreased from -20.52% to 5.59%. It is expected that this discount will continue to shrink until it reaches zero.
The approval of these spot ether ETF filings is expected to have a significant impact on the broader crypto markets. Share your thoughts and opinions on this subject in the comments section below.
