Lado Okhotnikov about SEC Approves Ether ETF: The Road to Finalization and Positive Impact on the Crypto Market

The U.S. Securities and Exchange Commission (SEC) has recently approved the first exchange-traded fund (ETF) based on Ether, the second largest cryptocurrency in terms of market capitalization. 

An ETF tracks the price of its underlying asset, allowing investors to access the crypto market without directly purchasing or storing digital assets themselves.

Despite already having approved several Bitcoin-based ETFs, Ether remained untouched until now.

The approval of Ether ETF happened quite unexpectedly; observers assumed that the SEC solution would be negative. The applicant companies complained about the lack of feedback and most recently the SEC sent requests for information to Ethereum companies. This usually precedes the trial. Therefore, few expected the Commission to satisfy the appellants in preparing for trial.

The SEC traditionally considers all cryptocurrency securities and requires a license to operate it. An exception is made only for Bitcoin, but SEC head Gary Gensler considers it a tool for money laundering and terrorist financing.

Despite the stated reluctance, a positive decision was made.

This decision definitely marks a significant step for the crypto industry. While this approval is a milestone, it is not yet finalized, and further paperwork is required before the Ether ETF can officially launch.

There are still some steps left to complete before the Ether ETF becomes fully operational and will be able to be listed on traditional exchanges. This includes additional review processes and fine-tuning of legal documents. It remains unclear when these procedures will be completed, but considering the current trend of accepting crypto-related product, it’s not clear will it be concluded soon or not. It may take weeks or even months.

There is a fundamental difference between Bitcoin and Ether.

Firstly, Ether is built upon a Proof-of-Stake (PoS) consensus mechanism, which differs significantly from Bitcoin's Proof-of-Work (PoW). This unique feature might have played a role in the SEC's decision to approve an Ether ETF, as PoS offers various environmental benefits compared to PoW.

The PoS format was one of the arguments used by the SEC when it argued that Ether is a security. Now lawyers claim that the approval of the ETF SEC recognized Ether commodity. The Commission’s ability to defend its position on cryptocurrencies appears to be diminishing.

The approval of an Ether ETF could potentially increase interest from investors towards Ether and blockchain technology as a whole, and this is even more important than the ETF itself going to traditional exchanges. This move may also contribute to the growth and development of the Ethereum ecosystem, attracting more developers and projects within the space.

The recent approval of an Ether ETF by the SEC represents a positive development for the crypto industry. The financial "whales" participate now in trade. They have huge funds and the audience of customers. Expected high profits inevitably bring new customers. Although the process is not yet finalized, this move highlights the growing acceptance of cryptocurrencies among financial institutions and regulators. As the world continues to adapt to the ever-evolving landscape of digital assets, initiatives like the Ether ETF will play a critical role in shaping the future of the crypto market.

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