SEC Changes Its Mind Regarding Spot Ethereum ETFs
The trigger for this sudden lean towards approval came when SEC personnel disclosed their inclination to greenlight the ETFs. Detailed comments on the pending applications were issued, suggesting that resolutions could lead to approvals as soon as this Thursday.
Thursday also marks the deadline for the SEC to make a decision on the 19b-4 filing from VanEck and ARK/21Shares, which, if approved, would clear the way for launching their spot Ethereum ETFs. Next month marks similar deadlines for other major players, including Grayscale Investments, Fidelity, BlackRock, and Franklin Resources.
All the ETFs Might Get Approved at Once
Reportedly, the SEC is coordinating the launch of multiple Ethereum ETFs simultaneously—a strategy reminiscent of the launch of spot Bitcoin ETFs, which saw several approvals at once earlier this January. While ETFs that track Ether futures contracts have previously received the SEC’s nod in the past, none holding the actual cryptocurrency have ever been passed.
Fidelity and Grayscale have all made big announcements regarding their applications today. Fidelity revealed that it is no longer staking the Ether tokens underpinning its ETF. Grayscale, on its part, updated its 19-b4 filing.
UPDATE: @Grayscale just filed an updated 19b-4 for their Ethereum Mini Trust. We should see a bunch of these come in today. pic.twitter.com/MuuZihyw8p
— James Seyffart (@JSeyff) May 21, 2024
For years, the Grayscale Ethereum Trust has operated akin to a closed-end fund, often trading at a markdown compared to the actual value of the Ether it holds. With the ETF conversion on the table, this discount could soon disappear, presenting a boon for current investors. Just yesterday, the Trust traded at a 12% discount to its Ether holdings.
ETH Makes a Comeback
The whisper of potential approval has already reverberated through the market. On Tuesday, Ether’s price surged 23% in just 24 hours, reaching $3,743. The prospect of Ethereum ETFs also hints at a broader acceptance that could extend to smaller cryptocurrencies like Solana and Avalanche.
The chart above shows a fluctuation pattern that suggests strong buying interest at lower levels with subsequent profit-taking as it nears higher resistance around $3,840. The sharp movements and high trading volume (445 ETH in the last segment) indicate active trading. If ETH sustains above the $3,720 support level, it could make another attempt to breach the $3,840 resistance in a few hours.
