ethereum prices retreated yesterday but remain stable at press time. Today, July 23, nine ethereum spot ETFs began trading on several regulated exchanges, primarily Cboe, Nasdaq, and NYSE.
The listing comes just two months after the U.S. Securities and Exchange Commission (SEC) reversed its decision and accelerated the approval process for Form 19b-4 filings by several players, including BlackRock.
Spot ETF launch brings regulatory clarity to eth
With this historic milestone, ethereum is the only crypto asset after bitcoin to get regulatory approval and a spot ETF approved by the strict regulator.
The inclusion of the derivative product is a win for ethereum and its broader ecosystem, which comprises a network of layer-2 solutions, a struggling non-fungible token (nft) industry, and a recovering decentralized finance (DeFi) scene.
Taking x, an observer x.com/VivekVentures/status/1815018045942702304″ target=”_blank” rel=”noopener nofollow”>grades that ethereum is now primed for a perfect storm of bullish catalysts that would propel the coin higher in the coming months.
Interestingly, while many proponents cite the expected inflow of institutional capital into eth via spot ETFs, the analyst believes that the regulatory clarity that comes with this product is a major boost to the price and growth of its ecosystem.
In a post, the analyst explained that these long-standing headwinds, especially resistance from the US SEC, have been limiting gains.
With the spot ETF on the scene, these obstacles that have been impeding growth for years will turn into tailwinds, which in turn marks the beginning of a new era of unrestricted adoption and investment, especially by Wall Street investors who primarily want regulatory clarity before exposure.
A new era for ethereum? The US SEC remains silent
As a condition of approving Form 19b-4, the U.S. SEC banned issuers from staking investors’ eth. Staking would have allowed issuers to receive rewards from the network if they locked up eth, helping to secure the network. Instead, spot ETF issuers must secure eth through regulated custodians.
This prerequisite eased the tension, allowing the regulator to approve all S-1 registration forms ahead of the listing of the products today. With these products available to investors, it effectively means the end of regulatory uncertainty around eth, especially after the transition from a proof-of-work system to a proof-of-stake system in 2021.
Unlike the regulator's position on bitcoin, which is considered a commodity, officials have not yet confirmed whether eth is a commodity. However, the US Commodity Futures Trading Commission (CFTC) has repeatedly stated that not only bitcoin and ethereum are commodities, but other coins such as Litecoin fall under the same roof.
Featured image from Canva, chart from TradingView
