In a major development, the SEC approved 8 Spot Ether ETF applications on May 23rd, paving the way for a major shift in the crypto landscape. Similar to Bitcoin ETFs, Ether ETFs will soon be available to trade on Nasdaq, Cboe, and NYSE. These ETFs will be linked to the price of Ether thereby enabling investors to gain exposure to the growth of Ether without actually owning the asset.
Ethereum is the second largest crypto token with a market capitalization of $457 billion and is currently trading at $3805 at the time of writing. Its price has rallied by close to 30% in the last 7 days in anticipation of the ETF approval. Analysts say that the majority of the whales who were expecting approval had already taken a position on the asset. This could be a reason why the price of Ether did not rally once the announcement was made.
The 8 applicants whose filings were approved are Van Eck, Bitwise, BlackRock, Grayscale, Invesco Galaxy, Ark 21Shares, Fidelity and Franklin Templeton.
As of now, the ETFs have been approved but the S-1 filings, an in-depth document about the financials of the organization offering the ETF are yet to be approved. Analysts say that since the timeline for the S-1 filings has not been defined yet, we didn’t see a rally post the announcement.
However, keeping the possibilities of a short-term rally aside, the Ethereum ecosystem benefits immensely from the approvals of Spot ETFs. ETFs could spark an inflow into Ethereum products similar to how we have seen with Bitcoin ETFs. Irrespective of the short-term highs and lows, the Ethereum blockchain remains a fundamentally resilient asset with a game-changing technological potential.
Most layer-2 tokens, Defi applications and several crypto-related products depend on the innovations of the Ethereum blockchain. Considering these factors, the approval of Ethereum ETFs is surely a big win for the industry, and this approval reinforces the interest of institutional investors in crypto-related products.
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