The United States Securities and Exchange Commission (SEC) has just approved the first batch of ethereum (eth) spot ETFs. These ETFs could have huge implications on financial markets, given the popularity of the asset and recognizing how bitcoin spot ETFs were the fastest growing ETFs in the history of ETFs. x.com/BitcoinMagazine/status/1773067179677630782″>according to BlackRock CEO Larry Fink.
<blockquote class="twitter-tweet”>
ONLY IN: SEC approves ethereum spot ETFs. pic.twitter.com/t7KLtcaMNg
– bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1793750833592455475?ref_src=twsrc%5Etfw”>May 23, 2024
The newly approved ethereum spot ETFs will allow investors to gain direct exposure to ethereum, the second-largest cryptocurrency by market cap, without having to purchase and store the digital asset themselves.
“TO BE CLEAR: This does not mean they will start trading tomorrow. This is just the 19b-4 approval. It also needs an approval of the S-1 documents, which will take time,” James Seyffart, ETF analyst at Bloomberg. x.com/JSeyff/status/1793752733763445043″>commented in the news. “We're hoping it will take a couple of weeks, but it could take longer. We should know more in about a week!”
The rapid change in the approval odds of these ETFs surprised everyone last Monday, when Bloomberg analysts Eric Balchunas and James Seyffart x.com/EricBalchunas/status/1792636523050906102″>increase Their chances of approval range from 25% to 75%. “I heard rumors this afternoon that the SEC might be doing a 180 on this (increasingly political issue), so now everyone is fighting (like us, everyone else assumed they would be denied),” Balchunas explained .
it's been a long x.com/wallstreetpro/status/1535944135353503744″>debate on whether ethereum should be considered a security or a commodity. Critics of ethereum claim that it passes the Howey test and should therefore be classified as a security. The Howey test consists of four criteria: investment of money, expectation of profit, common enterprise, and trust in the efforts of others. Here is a video below from 2014 of current SEC Chairman Gary Gensler explaining why he believed at the time that eth passes the Howey test.
<blockquote class="twitter-tweet”>
Friendly reminder that the current SEC Chairman believes ethereum passes the Howey test. pic.twitter.com/qFKeBFdKCH
– Modern Stacker (@ModernStacker) twitter.com/ModernStacker/status/1616285734389825536?ref_src=twsrc%5Etfw”>January 20, 2023
And now, due to recent regulatory developments, along with the approval of this ETF, regulators seem to be pushing to regulate eth as a commodity.
Yesterday, the House passed a bill to develop a regulatory framework for digital assets (HR 4763 – Financial Innovation and technology Act 21 (FIT 21)). The bill, unlike another bitcoin and cryptocurrency-related bill voted on in the House and Senate earlier this month, received positive feedback from the White House, initially saying they did not like the legislation in its current state. but that they wanted to work with Congress to find a solution. resolution, and will not veto it if it reaches President Biden's desk to sign it into law.
“Two-thirds of the House of Representatives voted in favor of clarity for cryptocurrencies,” Patrick McHenry, chairman of the US House Republican Financial Services Committee, told CNBC today. “It creates a legal framework, giving the SEC an appropriate role and the CFTC an appropriate role, rather than the set of contradictory regulatory actions that those two agencies have taken over the last ten years… It resolves what a digital asset is, tells you “gives a legal framework for the trade and purchase of those assets.”
<blockquote class="twitter-tweet”>
twitter.com/hashtag/WATCH?src=hash&ref_src=twsrc%5Etfw”>#LOOK
Main provisions
Clarifying twitter.com/CFTC?ref_src=twsrc%5Etfw”>@CFTC vs twitter.com/SECGov?ref_src=twsrc%5Etfw”>@SECGov jurisdiction
Next steps on the path to enactment
Don't miss this conversation pic.twitter.com/F49JjPf5tH
— Republican Financial Services Party (@FinancialCmte) twitter.com/FinancialCmte/status/1793605748737425650?ref_src=twsrc%5Etfw”>May 23, 2024
If FIT 21 passes the Senate and President Biden signs it into law, then eth could be classified as a commodity under these new guidelines, but the official outcome of that decision remains to be seen.
Congress is also currently “building a pro-crypto army.” x.com/SenLummis/status/1793654641974288558″>according to US Senator Cynthia Lummis, who x.com/SenLummis/status/1793404700714278978″>shared their support for the Chamber that approved FIT 21 yesterday.
<script async src="https://platform.twitter.com/widgets.js” charset=”utf-8″>
