New Chapter in Crypto Assets Regulation: US Regulators Approve Multiple Ethereum ETFs

On May 23, the U.S. Securities and Exchange Commission (SEC) approved the applications for 8 Ethereum ETFs, which are planned to be listed on Nasdaq, the New York Stock Exchange Arca, and the Chicago Options Exchange BZX. This decision is an important step toward the reality of spot Ether (ETH) exchange-traded funds, following the approval of Bitcoin ETFs earlier this January. This article will explore the process of SEC approving Ethereum ETFs, the latest trends in U.S. crypto regulation, and the opportunities it brings to the market.

1. Review of the SEC Approval Process

Since the approval of the Bitcoin ETF, the fate of the Ethereum ETF has been closely watched. Unlike Bitcoin, Ethereum does not have a fixed total supply limit, and its operation under the PoS mechanism has raised concerns among regulators about the risk of market manipulation. To address this issue, potential issuers of the spot Ethereum ETF have updated their application documents, promising not to use trust assets for staking to reduce the risk of ETH being classified as a security.

On May 23, the SEC approved the applications for 8 Ethereum ETFs. However, these ETFs have not yet received trading permission. The SEC approved the 19b-4 forms related to these ETFs, but issuers must wait for the S-1 registration statement to take effect before they can start trading. Industry analysts expect that it may take several weeks to months from approval to actual trading.

In addition to the 8 approved ETFs, there are 6 Ethereum spot ETFs awaiting approval, and decisions are expected to be made in the coming months.

2. New Trends in US Crypto Assets Regulatory Policy

The approval of this Ethereum ETF reflects a shift in the attitude of U.S. regulators towards crypto assets policy. The SEC seems to be distinguishing the essence of Ethereum as a digital currency from the financial activities it may involve that could be related to securitization. This attitude resonates with the recently passed "Financial Innovation and Technology Act for the 21st Century" (FIT21), which aims to clearly differentiate digital assets regulated by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

The core of the FIT21 Act lies in recognizing the legal nature differences between crypto assets as commodities and crypto assets with securities attributes, and establishing a corresponding regulatory framework. This shift in the regulatory landscape indicates that the United States is working to create a clearer and more balanced regulatory environment for the crypto assets market.

3. Opportunities for the Development of the Crypto Assets Trading Market

The approval of the Ethereum ETF has had a significant impact on the crypto assets market. After the announcement, the price of Ethereum surged sharply in a short period, briefly breaking through $3800. The market reacted strongly, with a total liquidation amount of $319 million within 24 hours.

In the long term, the launch of the Ethereum ETF may bring the following opportunities:

1. Expand the investor base: ETFs provide traditional investors with a convenient channel to participate in the Crypto Assets market.

2. Increase market liquidity: More funds entering the market may lead to increased liquidity and price stability.

3. Boosting the altcoin market: As many decentralized exchanges have trading pairs based on Ether, an increase in Ethereum's price may drive the entire altcoin market.

4. Enhance regulatory compliance: The introduction of ETFs may boost investor confidence and bring broader recognition to the Crypto Assets industry.

5. Opening the path for other crypto assets ETFs: The success of the Ethereum ETF may pave the way for other digital assets to apply for ETFs.

Overall, the approval of the Ethereum ETF signifies that Crypto Assets as an emerging asset class are gaining broader acceptance and recognition. This development may not only drive the growth of the Crypto Assets market but also promote the acceptance of digital assets across the entire financial industry.