The U.S. Securities and Exchange Commission (SEC) is currently evaluating spot Ethereum exchange-traded funds (ETFs) applications submitted by two prominent asset managers, ARK Invest and VanEck.
Based on an official announcement from the SEC dated September 21, the commission has called for public feedback concerning the advantages and potential pitfalls of greenlighting these ETFs. To facilitate this, a 45-day public comment window has been initiated for both submissions.
In their statement, the SEC mentioned, “The Commission is releasing this notice to invite comments on the proposed rule modification from all interested individuals.”
On September 6, the Chicago Board Options Exchange (Cboe BZX Exchange) lodged two 19b-4 applications with the U.S. securities regulatory body, seeking approval to list the ARK 21 Shares and VanEck Ethereum ETF investment products on their exchange.
Ark 21Shares presented its S-1 filing on September 6, whereas VanEck had already submitted theirs in July 2021.
As outlined in the filings, the proposed ETFs aim to mirror the price of Ether, referencing the CME CF Ether-Dollar Reference Rate, with adjustments accounting for expenses and obligations.
However, it’s pivotal to understand that the SEC’s review isn’t synonymous with an assured approval of these ETFs. Interestingly, the debut Ether futures ETF is anticipated to be introduced the following month.
The regulatory authority has exhibited a preference towards futures-based ETFs for both Bitcoin (BTC) and Ether (ETH). This is attributed to their belief that the protective measures offered by the CME futures market surpass those of a spot ETF.
Spot Ethereum ETF Race is On
Recently, Bloomberg ETF analyst, James Seyffart, made observations regarding the spot Ether ETFs by ARK 21 Shares and VanEck, stating that they “will set the wheels in motion.”
He took to Twitter earlier this month and said, “The race for Spot Ethereum ETF has officially begun. Although it’s early days, my rough projection for a final decision on these applications would be around ~May 23, 2024.”
Seyffart also foresaw a surge in spot Ethereum ETF applications in the near future.
However, introducing Ethereum ETFs is not without challenges, particularly from a regulatory standpoint. Top concerns for regulators encompass investor safety, potential for market manipulation, and volatility of the underlying asset. Nonetheless, despite these hurdles, spot Ethereum ETFs hold the promise of enhancing acceptance, liquidity, and enthusiasm towards the Ethereum ecosystem.
