The U.S. Securities and Exchange Commission (SEC) has given the green light to the launch of spot ether (ETH) exchange-traded funds (ETFs), allowing these funds to start trading as early as next Tuesday, July 23.
According to sources familiar with the matter, the SEC informed ETH ETF issuers on Monday that their funds can begin trading after the final versions of their S-1 registration documents are submitted by Wednesday. This marks a significant milestone for the crypto industry, as the launch of these ETFs is expected to bring increased institutional investment and liquidity to the ether market.
Potential Inflows and Impact on Ether Price
Industry experts predict that the launch of spot ether ETFs could lead to substantial inflows of capital into the ether market. Crypto exchange Gemini estimates that the ETFs could see net inflows of up to $5 billion in the first six months, while Steno Research expects inflows of up to $20 billion in the first year.
The anticipation of these ETFs has already had a positive impact on the ether price, with the cryptocurrency rising as much as 7.3% on Monday, outpacing bitcoin's 6% gain. The broader crypto market index, CoinDesk 20, also climbed 5.6% on the news.
Regulatory Approval and Issuer Details
The SEC's approval of the spot-ether ETFs comes after a lengthy review process, during which the regulator had no further comments on the recently submitted S-1 registration documents. The final versions of these documents must be submitted by Wednesday, paving the way for the funds to be listed on exchanges next Tuesday.
While the issuers have not yet disclosed all the details, including the management fees they will charge investors, a few firms, such as VanEck and Invesco Galaxy, have already revealed their fee structures. The launch of these ETFs will provide investors with a regulated and accessible way to gain exposure to ether, potentially driving increased adoption and liquidity in the ether market.
Significance for the Crypto Industry
The approval of spot ether ETFs by the SEC represents a significant milestone for the crypto industry, as it marks the first time the regulator has allowed the trading of a spot-based cryptocurrency ETF. This development is seen as a positive step towards the broader mainstream adoption of digital assets, as it provides institutional and retail investors with a more regulated and familiar investment vehicle to gain exposure to the ether market.
The launch of these ETFs is also expected to have broader implications for the crypto ecosystem, potentially leading to increased institutional investment, improved price discovery, and greater liquidity in the ether market. As the second-largest cryptocurrency by market capitalization, the successful launch of ether ETFs could pave the way for similar products for other digital assets in the future.
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