Key points:

  • The SEC has approved applications from Nasdaq, CBOE and NYSE to list Ether ETFs.
  • 9 issuers plan to launch Ether ETFs.
  • Issuers of these ETFs still need the SEC to approve their registration applications.

In a surprise move, the US Securities and Exchange Commission (SEC) has approved applications from Nasdaq, the CBOE and the NYSE to list exchange-traded funds (ETFs) based on the price of ether. This decision paves the way for these products to potentially begin trading as early as this year.

It is important to note that ETF issuers are still required to obtain SEC approval before launching products. Despite this, the approval of applications on Thursday was a significant event for both these companies and the entire cryptocurrency industry. Before Monday, many expected the SEC to reject the applications.

The process of launching an ETF on ether

Nine issuers, including VanEck, ARK Investments/21Shares and BlackRock, will launch ETFs based on Ethereum, the second-largest cryptocurrency. This comes after the SEC approved the first Bitcoin ETF in January, marking a watershed moment for the industry.

Thursday was the SEC’s deadline to rule on VanEck’s application. Market participants expected a refusal because the SEC did not contact them about the applications. However, on Monday, SEC officials unexpectedly asked the exchanges to make urgent changes to the documentation.

The introduction of spot Bitcoin ETFs has already demonstrated significant benefits for the digital asset and ETF market. Spot Ether ETFs are expected to provide similar protection for traders in the US.

When will new products be launched on air?

The exchanges have filed applications with the SEC to change the rules required to list new ether ETFs. However, issuers of these ETFs still need to have the SEC approve their registration applications. These applications must detail the information that will be available to investors.

Unlike exchange filings, there is no set time frame within which the SEC must make a decision on ETF registration applications. Industry officials are unsure how long the review process will take. In addition, the SEC’s Division of Corporate Finance may request changes to the filings in the coming days or weeks.

It’s worth noting that the SEC has rejected applications for spot Bitcoin ETFs for over a decade due to concerns about market manipulation. However, last year the Commission was forced to approve the first Bitcoin ETFs after Grayscale Investments won a legal challenge.

Ether is more complex than Bitcoin, and the SEC can take months to review applications. But because Bitcoin ETFs offer an established template, it can speed up the approval process for products.