- The launch of spot Ethereum ETFs is almost guaranteed after a sudden flurry of related regulatory activity.
- ETF issuers have updated their regulatory filings with the SEC, ensuring that the Ether held by the issuers will not be used in staking.
A hectic week of regulatory activity has shifted the odds of spot Ethereum (ETH) ETF approval from highly unlikely to virtually inevitable.
This enthusiasm marks a dramatic shift from gloomier prospects when the deadline for approval approached with little activity from the Securities and Exchange Commission (SEC).
The initial regulatory about-face occurred when the SEC requested that the NYSE and Cboe exchanges update their 19b-4 filings.
The 19b-4 filings are the requests that would allow any approved spot Ethereum ETFs to trade on these exchanges.
The SEC then approved these updated filings, confirming that approval for some or all of the proposed spot Ethereum ETFs will soon follow.
Some ETF issuers have also updated their filings to reflect the elimination of staking for the Ether that will be held by the ETFs.
The staking of the Ether held by the ETFs was a major issue in the SEC’s murky determination of whether Ethereum was considered a ‘security’ for regulatory purposes.
This sudden regulatory shift likely reflects crypto’s growing relevance in national politics.
Both Democrats and Republicans have been making increasingly positive comments on crypto as they vie for the critical swing votes of young people.
Ethereum soared on the news of the regulatory shift and has continued to steadily climb alongside the likelihood of approval.
Crypto in the Political Spotlight Before Presidential Election
The source of this sudden regulatory reversal is likely the growing relevance of crypto in national politics.
The House of Representatives recently passed the Financial Innovation and Technology for the 21st Century Act (FIT21).
This is an industry-backed bill that promises to provide much-needed regulatory clarity for the crypto industry.
Not only did many Democrat lawmakers vote for the bill, but the White House has suggested that President Biden will no longer veto the bill if it passes the Senate.
Presidential candidate Donald Trump has also repeatedly made positive comments about crypto on his campaign trail.
These recent developments likely acknowledge the important swing vote of young Americans, who are far more enthusiastic about crypto than older voters.
“It looks like Washington has gotten the message that crypto is good for America and that it’s popular with American voters, and I think that’s trickling through into different parts of policy.”
– Matt Hougan, Bitwise Asset Management CIO, stated.
Ethereum Soars on Regulatory Shift
The impact of this regulatory shift on the price of Ethereum has been strong and consistent.
Not only did the price of Ethereum soar more than 10% on the news, but it continued to climb to an almost 20% total gain over the ensuing days.
The reaction to the 19b-4 approval was much more muted, but this likely just reflects the market’s previous confidence that the regulatory shift guaranteed eventual approval.
That said, there are some in the crypto community who doubt that the impact of the spot Ethereum ETFs will be as significant as the spot Bitcoin ETFs.
In particular, the impact of the removal of so many Ether from the staking process remains to be seen.
