ETFs
Ether cryptocurrency ETFs are approved by the SEC
Federal regulators Thursday approved an investment product linked to the cryptocurrency Ether, the most valuable digital asset after Bitcoin, representing a major boost for the crypto industry.
The Securities and Exchange Commission said a group of exchanges may begin listing investment products known as exchange-traded funds, or ETFs, tied to the price of Ether. The products would offer people a simpler, simpler way to invest in crypto, potentially raising prices and driving wider adoption of digital currencies.
In January, the SEC similar approved products that track the price of Bitcoin, leading to a wave of new investments that have helped propel the price of Bitcoin to a record high.
The impact of Ether’s approval may take longer to be felt in the market. Before exchanges can begin offering Ether ETFs, the SEC must also approve a separate set of applications from companies seeking to issue them, including large financial firms like BlackRock and Franklin Templeton. This process could take weeks or months, depending on the financial services. experts.
An SEC spokeswoman said the agency had no comment beyond a formal order approving the products.
The news sparked celebrations across the crypto industry. A representative for 21Shares, one of the companies seeking to offer the Ether investment product, called it an “exciting moment for the industry as a whole.”
But industry critics called the approval a dangerous development that would encourage greater investment in a volatile market.
“The SEC has failed in its mission to protect investors and markets,” said Benjamin Schiffrin of Better Markets, a nonprofit that fights for stricter financial regulation. said in a statement.
Offered by large financial services companies, ETFs are essentially baskets of assets: rather than buying the assets directly, clients buy shares in these baskets. The products are easy to trade, from brokerage accounts with companies like Vanguard or Charles Schwab, and are popular with wealth advisors and other financial managers.
In the crypto world, ETFs offer another key advantage: simplicity. Rather than navigating the complexities of an online crypto wallet, a customer could go online and purchase shares in a Bitcoin or Ether ETF alongside stocks traded on Wall Street.
For years, crypto advocates have viewed these products as a promising way to encourage broader use of digital currencies. Before Bitcoin ETFs were approved, crypto companies fought the SEC in court, securing a legal victory in August that forced the agency to license the products.
Bitcoin ETFs have proven extremely popular, attracting billions of dollars of investment.
The price of Ether has rebounded in recent months, following a crypto downturn that began in 2022. Ether currently professions at around $3,800 per coin, more than 20% off its high of just under $4,900.
This represents a small fraction of the price of Bitcoin, which trades at around $68,000 per coin.