Securities and Exchange Commission green light listing of eight Ether spot exchange-traded funds on US stock exchanges, approval of the asset manager’s Form 19b-4 on Thursday afternoon. “This is one of the biggest regulatory years in recent SEC history,” said VanEck head of digital asset research Matthew Siegel. Luck in the statement. Issuers include BlackRock, VanEck, Fidelity and Grayscale, among others.
The agency’s relative silence on pending applications in recent months has led many in the cryptocurrency industry to view approval this year as a pipe dream. Bloomberg analysts predicted chances of approval will be only 25% already on Monday afternoon. But then, in a sudden turn of events, on Monday CoinDesk reported that regulators “suddenly” asked issuers to update their 19b-4 filings on an expedited basis. Since then, at least eight of nine issuers have done so, and Bloomberg experts have raised their forecast to 75%. The price of Ether has risen 25% since Monday and was trading at $3,855 as of 5:13 pm EST.
The SEC will not comment on the order, a spokesman said. Luck.
The updates requested by the SEC on Monday remain undisclosed, but Eric Balchunas, senior ETF analyst at Bloomberg, said: Luck he knows “for sure” that staking will be prohibited. Indeed, Fidelity this week updated its Filing an S-1 Application with the betting component omitted.
But in order to begin trading in financial products, the SEC must then approve issuers’ Form S-1 filings. These forms describe to potential investors and the SEC the structure of the asset, how it will be managed and, in this case, how it plans to reflect the performance of the underlying asset – Ether tokens. But it’s also clear that approving these forms is a case of “when not if,” Bloomberg’s James Seyffarth wrote. X.
“We cannot recall a time when an S-1 was not approved after 19b-4 approval. I don’t think there is a precedent,” Balchnaus added. He estimates it will take about two weeks to approve the forms, as he expects there will only be one round of comments from the SEC. This is because spot Bitcoin ETFs have already done a lot of “groundbreaking work”, so in this case the applications will require minor “fine tuning”. In the case of the Bitcoin ETF, each round of comments took two weeks to complete.
“At Grayscale, we value the opportunity to constructively engage with regulators when considering Ethereum spot ETFs, and we remain optimistic about the potential for Ethereum to continue moving into the US regulatory perimeter in an ETF wrapper,” a Grayscale spokesperson said in a statement.
This is a “key step” toward offering U.S. investors “easier access, greater protection and assurance,” an Invesco spokesman said.
“Legal Voting Bloc”
In cryptocurrency, the question arises: why did the SEC change its position? Experts told Luck it was most likely a top-down political order. Thursday’s approval is “proof that the crypto crowd is a legitimate voting bloc,” VanEck’s Siegel says.
A bipartisan group of cryptocurrency-friendly House lawmakers has called on the SEC and Chairman Gary Gensler to approve ETFs in letter on Wednesday. “The current regulatory environment for digital assets poses a variety of risks for consumers, investors, and market participants,” they wrote. In their opinion, the approval will provide investors with access to cryptocurrency in a more secure, transparent and regulated format.
Admittedly, while the letter is unlikely to tip the scales, it does help build a consensus in Washington that the elusive cryptocurrency vote could have weight.
“Politics is powerful, especially in an election year. We heard inside that it was politically motivated. Democrats don’t want Donald Trump and the Republicans to win on this issue and lose votes from single-issue voters,” Balchunas says.
A survey released this week by the Federal Reserve shows that only 1% of Americans used cryptocurrency to buy something in 2023, but in a very thin election with Trump poll only 1% ahead When it comes to President Joe Biden, even 100,000 votes or so could make all the difference.
“Very nice”
As a result, the crypto community is becoming a growing priority in Washington, DC. The House of Representatives voted Wednesday on landmark legislation that would establish an oversight system around “market structure.”
The 21st Century Financial Innovation and Technology Act, or “21st Century Financial Innovation and Technology Act.”FIT21“Outlines the division of powers between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and creates rules for key issues such as pooling and custody. Although the bill was supported by 208 Republicans, it was initially supported by only a handful of hard-nosed, cryptocurrency-friendly Democrats. But support has accelerated over the past month, resulting in 71 Democrats voting in favor, with support also coming from Senate Majority Leader Chuck Schumer and former House Speaker Nancy Pelosi.
“It’s exciting that effective communication from the crypto community has changed politics in Washington to the extent that elected Democratic leaders are now voting yes on laws that reverse the regime’s hostile approach to this new asset class,” Siegel says.
FIT21, moving through the House, has faced Gensler’s efforts to warn Democrats against it. “[FIT21] will create new regulatory gaps and undermine decades of precedent for oversight of investment contracts, exposing investors and capital markets to immeasurable risk,” Gensler said in the report. statement released Wednesday.
Moreover, over the past month, Trump has also doubled down on his pro-cryptocurrency stance. On Tuesday his presidential campaign said it will begin accepting donations through any crypto asset accepted through Coinbase. “Biden’s surrogate, Elizabeth Warren, said in an attack on cryptocurrency that she is creating an ‘anti-crypto army’ to limit the right of Americans to make their own financial choices,” the campaign said in an ad, citing a re-election ad. Warren published on X last year. “MAGA supporters, now with a new cryptocurrency option, will form a crypto army, taking the campaign to victory on November 5th!”