In a groundbreaking development for the crypto community, the US Securities and Exchange Commission (SEC) has approved rule changes that pave the way for Ethereum ETFs, setting the stage for the potential launch of eight exchange-traded funds. Major players like BlackRock, Fidelity, Invesco, and Art Invest are poised to introduce ETFs that invest in ether, the cryptocurrency of the Ethereum blockchain.
However, the journey isn’t over yet. A second round of approvals is necessary for these rule changes to be fully implemented. SEC Chair Gary Gensler has previously expressed caution due to ongoing fraud within the crypto sector, stating, “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, awaiting jail, awaiting extradition.”
This move follows the SEC’s earlier approval of 11 bitcoin spot ETFs this year, signaling a growing appetite for crypto-based financial instruments.
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, as 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 a range of custody methods. This will be a prime target for hacks, attacks, and possible human error. We anticipate greater expectations around risk mitigation and security capabilities, meaning security is paramount and must be a top priority for ETF managers.”
