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May 25, 2024 12:16 PM EDT
Applications from Nasdaq, CBOE, and NYSE to list exchange-traded funds (ETFs) linked to the price of ether were authorized by the U.S. Securities and Exchange Commission (SEC) on Thursday. This might lead to the products' listing and trading later this year.
Although the ETF issuers must also receive clearance before the products can go on sale, Thursday's approval is a huge unexpected victory for those companies and the cryptocurrency sector as a whole since, up until Monday, everyone had anticipated that the SEC would reject the files.
Nine issuers, including VanEck, ARK Investments/21Shares, and BlackRock, intend to introduce ETFs linked to the second-largest cryptocurrency following the SEC's historic approval of bitcoin ETFs in January.
The SEC has until Thursday to make a decision about VanEck's filing. Given that the SEC had not spoken with them on the applications, market participants were ready for a negative response.
SEC authorities, however, took a surprising step on Monday, asking the exchanges to expeditiously polish the files. This left the sector rushing to finish weeks' worth of work in a matter of days, according to sources.
The SEC permission was requested by the exchange applicants for a rule modification necessary to list new products; however, before the issuers can begin trading, the SEC must still approve the ETF registration statements that include investor disclosures.
The SEC does not have a deadline to decide on those assertions, unlike with exchange filings. Industry insiders stated that it was uncertain how long that would take. According to two people with knowledge of the process, many issuers are prepared to go live. However, the SEC's corporate finance division has hinted that it would probably ask for updates and modifications in the upcoming days and weeks.
Read also:What Are Crypto ETFs? A Beginner's Guide
Due to concerns about market manipulation, the SEC banned spot bitcoin ETFs for nearly ten years before being compelled to accept them following Grayscale Investments' successful legal challenge last year.
The CEO of CF Benchmarks, which creates the indexes for a number of bitcoin and ETFs, Sui Chung, stated that the SEC may take months to examine the claims since ether is more complicated than bitcoin. However, he noted that "there's only so much slow rolling" the SEC can do because the bitcoin ETFs provide a pre-existing framework.
Over $30 billion has been invested in cryptocurrency exchange-traded funds (ETFs) by a variety of investors, including individual investors, financial planners, and hedge funds.
The judgment made on Thursday is a boost to the cryptocurrency industry's attempts to gain traction in traditional finance. This week, listed cryptocurrency products were also cleared by the UK authorities, while the U.S. The House of Representatives has enacted a historic law aimed at offering cryptocurrency regulation certainty.n The business is greatly bolstered by the bill's broad bipartisan backing, even if the Senate must yet approve it.
Related article:Trading Bitcoin Without the Hassle? ETFs Offer Easy Access, But Watch Out for Costs
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