The U.S. Securities and Exchange Commission (SEC), albeit somewhat reluctantly, finally gave the green light to the country’s first spot Bitcoin ETF on January 10. With its decision, the SEC simultaneously approved 11 spot Bitcoin ETFs. Following the SEC’s approval of spot Bitcoin ETFs, the focus in the cryptocurrency world shifted to Ethereum (ETH), the largest altcoin, with speculations about the SEC’s potential approval of a spot ETF for it.
Will a Spot Ethereum ETF Get Approval?
2023 has been a year in which numerous asset management companies submitted applications to the SEC for a Bitcoin and Ethereum exchange-traded fund (ETF). The interest in this direction increased, especially after the world’s largest asset management company, BlackRock, applied for a spot Bitcoin ETF in June and then for an Ethereum spot ETF in November, with other companies following BlackRock’s lead.
With 11 spot Bitcoin ETFs currently trading on U.S. exchanges, the focus has now shifted to other cryptocurrencies like Ethereum. Several companies, including Grayscale Investments, which is trying to convert its Ethereum Trust into a spot ETF as it did with its flagship product GBTC, have applied to the SEC for such a product and are waiting for approval.
However, the SEC continues to postpone its decision, and most applications now have to wait until May. As in the past with the spot Bitcoin ETF, the SEC’s tendency to delay or reject cryptocurrency ETFs for years before approval suggests that the expected approval may not come soon.
The on-chain data analysis platform Santiment conducted a significant survey to determine what the cryptocurrency world thinks about the issue. According to the survey results, the majority (more than 52% of participants) expect a spot Ethereum ETF to be approved in the U.S. by the end of this year. About 10% expect such an ETF to be greenlit this month, while 11.3% do not expect such approval to come either in the short term or in the long term.
Spot ETF and Ethereum Price
The price of Bitcoin continuously rose in the months before the SEC’s approval. After the ETFs were approved and started trading, the trend reversed, and following the rise to $49,000 after the approval, the price dropped to $41,900 in the early hours of today. This situation has provided a significant advantage to those who have been on the “buy the rumor, sell the news” side so far.
On the other hand, the price of ETH has just started to rise with the narrative of a spot ETF, and many expect a speculative uptrend to begin as many anticipate the arrival of an ETF soon. Therefore, like Bitcoin, ETH’s price is expected to rise significantly before the SEC’s approval.
