The U.S. Securities and Exchange Commission (SEC) approved The first batch of spot Ethereum (ETH) ETFs. Given the popularity of this asset and the fact that the Spot Bitcoin ETF was the fastest growing ETF in ETF history, these ETFs could have a major impact on the entire financial market. according to To BlackRock CEO Larry Fink.
Latest Update: 🇺🇸 SEC Approves Spot Ethereum ETF. pic.twitter.com/t7KLtcaMNg
— Bitcoin Magazine (@BitcoinMagazine) May 23, 2024
The newly approved spot Ethereum ETF will allow investors to invest directly in Ethereum, the second-largest cryptocurrency by market cap, without having to buy and store the digital asset themselves.
“Just to be clear, this doesn’t mean trading will start tomorrow. This is just a 19b-4 approval. You also need to get the S-1 approved, which will take time,” said Bloomberg ETF analyst James Seifert. Commented News, “We expect it will take about two weeks, but it could take longer. We should have more details in about a week!”
Last Monday, Bloomberg analysts Eric Balchunas and James Seifert surprised everyone with a sudden change in the approval odds for these ETFs. raised The chances of approval went up from 25% to 75%. “In the afternoon, we heard rumors that the SEC might do a 180-degree turn on this (an increasingly politicized issue), and now everyone is panicking (everyone else, like us, was expecting it to be rejected),” Balchunas explained.
for a long time Discussion There is a debate about whether Ethereum should be considered a security or a commodity. Critics of Ethereum argue that it passes the Howey test and therefore should be classified as a security. The Howey test consists of four criteria: investment of money, expectation of profit, common enterprise, and reliance on the efforts of others. Below is a video of current SEC Chairman Gary Gensler from 2014 explaining why he believed ETH would pass the Howey test at the time.
We are pleased to announce that the current Chairman of the SEC believes Ethereum will pass the Howey test. pic.twitter.com/qFKeBFdKCH
— Modern Stacker (@ModernStacker) January 20, 2023
And with recent regulatory developments, alongside the approval of this ETF, regulators appear to be moving towards regulating ETH as a commodity.
Yesterday, a bill to create a regulatory framework for digital assets (HR 4763 – Financial Innovation and Technology Act 21 (FIT 21)) was passed by the House of Representatives. This bill is different from other bills related to Bitcoin and cryptocurrencies in that it does not regulate digital assets. invoice The House and Senate voted earlier this month. Received positive feedback The White House initially said that while they did not like the bill as it stood, they were willing to work with Congress to find a solution, and that they would not veto it if the bill reached President Biden’s desk and was signed into law.
“Two-thirds of House members voted to clarify cryptocurrencies,” Rep. Patrick McHenry, Republican chairman of the House Financial Services Committee, told CNBC today. “This bill creates a legal framework that gives the SEC and CFTC their proper roles, in contrast to a series of contradictory regulatory actions the agencies have taken over the past decade. It defines what digital assets are and provides a legal framework for trading and purchasing those assets.”
#clock: chairman Patrick McHenry Join SquackCNBC Discuss yesterday’s historic bipartisan vote #FIT21Areas he covers:
‼️ Main regulations
🔎 Clarification About the CFTC versus SEC Government jurisdiction
🚂 Next steps towards enactment
📺 Don’t miss the conversation 👇 pic.twitter.com/F49JjPf5tH
— Financial Services GOP (@FinancialCmte) May 23, 2024
If FIT 21 passes the Senate and is signed into law by President Biden, ETH could be classified as a commodity under these new guidelines, though the official outcome of that decision is yet to be seen.
Congress is currently “building a pro-crypto army” according to Senator Cynthia Lummis share Her support for the House passing FIT 21 yesterday.
