Author: Helene Braun, CoinDesk; Translated by: Baishui, Jinse Finance
U.S. regulators have given final approval to a spot exchange-traded fund that holds Ethereum (ETH), giving Americans access to the second-largest cryptocurrency through an easily traded vehicle.
The decision ends a multi-year process for the SEC to approve an Ethereum ETF, following the regulator’s approval of a Bitcoin (BTC) ETF in January. Ethereum ETFs could make Ethereum more popular with traditional investors, as the funds can be bought and sold through traditional brokerage accounts. Bitcoin ETFs have attracted tens of billions of dollars in investment since their debut in January.
A few weeks ago, approval seemed uncertain. But in late May, SEC officials suddenly began reaching out to people who wanted to issue ETFs after a long period of silence. Then, on May 23, the regulator approved a key document, opening the path to full approval with its latest decision.
“We have now fully entered the era of cryptocurrency ETFs,” said Matt Hougan, chief investment officer at Bitwise. “Investors can now access over 70% of the liquid crypto asset market through low-cost ETPs.”
Kyle DaCruz, head of digital assets at VanEck, said: "As the first company to apply for an Ethereum ETF in 2021, we have always believed that investors should be able to invest in Ethereum through tools that they find convenient and familiar. If Bitcoin is digital gold, then Ethereum is the open source application store and the gateway to thousands of applications that will utilize blockchain technology."
Impact on Ethereum Price
In January this year, the Bitcoin spot ETF was approved and began trading, becoming the most successful product in the history of exchange-traded products. Judging from the speed of capital influx, this ETF soared by more than 58% in just two months, pushing the price of the largest cryptocurrency to a record high.
Some analysts predict that while spot ETH ETFs could push Ethereum’s price to $6,500, these funds won’t see as much inflow as their Bitcoin-focused counterparts.
Research firm Steno Research predicts that the newly launched ETF could see inflows of $15 billion to $20 billion in the first year, which is roughly equivalent to the amount of money that the Bitcoin spot ETF has in just seven months. A report from the company pointed out that Ethereum does not have the "first-mover advantage" that Bitcoin has, and lacks a strong narrative such as Bitcoin's "digital gold", although many supporters believe that it is "digital gold".
