The Securities and Exchange Commission (SEC) is undergoing a significant change that signals a positive outlook for Ethereum spot exchange-traded funds (ETFs). Just a week ago, it seemed unlikely that giants like BlackRock and VanEck would receive approval for their ETF proposals that involve holding Ether directly.
However, the SEC’s stance appears to have shifted, with reports suggesting a possible full-scale endorsement. Ethereum currently has a market capitalization of $455 billion, making it the second-largest cryptocurrency after Bitcoin. This change in SEC’s attitude will make Ethereum even more accessible to both everyday investors and institutions.
The SEC’s inclination towards approving ETFs became apparent when its personnel disclosed their support. Detailed comments on the pending applications were issued, indicating that approvals could be granted as early as Thursday.
Thursday is also the deadline for the SEC to decide on the 19b-4 filing from VanEck and ARK/21Shares, which, if approved, would pave the way for the launch of their spot Ethereum ETFs. Other major players in the industry, including Grayscale Investments, Fidelity, BlackRock, and Franklin Resources, have similar deadlines next month.
It is reported that the SEC is planning to coordinate the launch of multiple Ethereum ETFs simultaneously, following a similar strategy used for spot Bitcoin ETFs earlier this year. While ETFs tracking Ether futures contracts have been approved in the past, none that hold the actual cryptocurrency have ever passed.
Fidelity and Grayscale have also made significant announcements regarding their ETF applications. Fidelity stated that it is no longer staking the Ether tokens supporting its ETF, while Grayscale updated its 19-b4 filing.
The Grayscale Ethereum Trust has operated like a closed-end fund for years, often trading at a discount compared to the actual value of the Ether it holds. With the possibility of ETF conversion, this discount could disappear, benefiting current investors. Yesterday, the Trust traded at a 12% discount to its Ether holdings.
The whisper of potential approval has already had an impact on the market. On Tuesday, the price of Ether surged 23% in just 24 hours, reaching $3,743. The potential for Ethereum ETFs also suggests a broader acceptance that could extend to smaller cryptocurrencies like Solana and Avalanche.
The trading chart above indicates a pattern of strong buying interest at lower levels and profit-taking as it approaches higher resistance at around $3,840. The sharp movements and high trading volume indicate active trading. If ETH maintains support above the $3,720 level, it may attempt to break the $3,840 resistance in the coming hours.
