Ether ETF Decision: What Investors Need To Know About The SEC's Next Move

Investors hoping to gain exposure to Ethereum ETH/USD through a U.S. exchange-traded fund (ETF) will have to keep on waiting, as the U.S. Securities and Exchange Commission (SEC) opened a three-week public comment period on proposals from Grayscale Investments, Fidelity Investments and Bitwise Asset Management for Ethereum-based ETFs.

What Happened: The move, announced through agency notices on Tuesday, grants a three-week span for “interested persons” to present their views on the proposed regulatory adjustments, Coindesk reported.

This development arrives amid tempered expectations within the crypto community, particularly following the SEC’s green light for Bitcoin spot ETFs earlier in January — a decision that momentarily buoyed hopes for similar endorsements for Ethereum-based products.

The pathway for approval seems less straightforward for Ethereum.

The SEC’s previous resistance to Bitcoin ETF applications was somewhat mitigated by a notable legal setback in a dispute with Grayscale, leading to a reluctant approval that, according to SEC Chair Gary Gensler in January, does not extend to other cryptocurrencies.

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Gensler emphasized the Bitcoin ETF approval “shouldn’t signal anything about the commission's views as to the status of other crypto assets under the federal securities laws.”

The introduction of Bitcoin ETFs has significantly boosted investment in the leading cryptocurrency, suggesting Ethereum could enjoy a similar boon should the SEC extend its approval to Ethereum ETFs.

Nevertheless, the regulatory body is investigating Ethereum’s classification, contemplating whether it should be deemed a security — a designation that would differentiate its legal status from that of Bitcoin.

With a decision deadline set for May 23 on some of these ETF applications, the crypto and financial sectors are closely watching.

What’s Next: This unfolding scenario around Ethereum ETFs and their potential impact on the market is poised to be a topic of keen interest at the upcoming Benzinga’s Future of Digital Assets conference on Nov. 19.

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