There is a significant development in the industry of cryptocurrency with the approval of Bitcoin spot ETF. Everyone in the industry of crypto is waiting for the much-anticipated approval of the Ethereum ETFs. In this blog post, we will look at the factors of this trend and its possible effects on the Bitcoin market.
SEC changing its place on cryptocurrency ETFs
SEC stands for United States Securities and Exchange Commission, which very hardly ever approves ETFs exchange-traded funds, especially those that are connected to cryptocurrencies. Herter Pierce, who’s a commissioner, has raised his concerns over the consistent rejections of Bitcoins ETF without any concrete evidence of rejection.
Ethereum is different in the race for ETF approval
The inclusion of politics has made it very difficult for the Bitcoin ETF to issue its license. While the journey of Ethereum is way less difficult. Nowadays, the SEC is considering seven proposals for the Ethereum spot ETFs. Why did the SEC change its position on cryptocurrency ETFs VanEck is leading and it has until May 2024 so that it can submit its application.
VanEck’s application impacts the Ethereum ETF
The SEC has actively started hearing about VanEck’s application. There are many factors that the SEC might look at and will there be an impact on the approval’s timeline? Moreover, there’s still undecided about what role the world’s best asset manager, of Blackrock, will play.
Is liquidity a potential stumbling block for Ethereum’s ETF approval?
Unlike Bitcoin, Ethereum allows different types of transactions on its vast network and functions as a trustable currency and storing of value. Because of its concerns regarding the flow of cash, Ethereum transactions to proof of stake are affecting the supply of cryptocurrency and making it more challenging to approve an Ethereum spot ETF.
Impact of Ethereum ETF approval on the broader cryptocurrency market
The approval of Ethereum as an ETF is not only one big step forward for cryptocurrency, but it also creates opportunities for other ETPs as well which are connected by cryptocurrencies. This also includes complicated instruments like properly structured products and simpler ones like the spot products. It is expected that more firms are joining the market of bitcoin as a result of this certification.
Does the classification of Ethereum as a security matter in the context of an ETF?
When Ethereum is developed as an ETF, it has presumed security status which has ended the prolonged debate over whether it will belong to this category or not. This brings into line the recent situation of ETFs for commodities and almost the same financial products have been used in the past.
Are we institutionalizing the cryptocurrency industry?
With the legitimization of Bitcoin spot ETF, a major task has been fulfilled in the crypto sector, as it is moving into the pathway of traditional finances. With this recent approval of the Ethereum spot, it can be expected that the market of cryptocurrency will be completely institutionalized.
In all that, it can be seen that the Ethereum spot ETF approval is coming soon, which will have major changes in the crypto industry. There will be a new era of investing in cryptocurrency, there is increasing institutional participation and acceptance of Ethereum’s features. The position of the SEC is changing.