On May 23, the U.S. Securities and Exchange Commission (SEC) gave its approval for a spot Ethereum ETF, marking a significant development in the cryptocurrency investment landscape. However, the approval process for this ETF differed from that of a spot Bitcoin ETF, which was approved in January. While the spot Bitcoin ETF was approved by a five-member committee, including SEC Chairman Gary Gensler, the spot Ethereum ETF gained approval from the SEC's Division of Trading and Markets.
Several prominent entities, including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton, received approval for their 19b-4 filings from the SEC. However, the SEC declined to provide further comment beyond official decisions, stating that it is within the purview of the Department of Trading and Markets to handle such matters in accordance with their mandate.
Although there is curiosity within the crypto community about the differences in the approval processes for the two ETFs, Bloomberg ETF analyst James Seyffart explained that this approach is normal. He noted that many approvals follow a similar procedure, and expecting a formal vote on every decision or document from the SEC would be impractical. Moreover, attributing the SEC's decision to various factors, including political pressure, the upcoming election, and the implementation of environmental, social, and governance rules, underscores the complexity of regulatory considerations.
One notable contrast between the approval processes for the two cryptocurrency ETFs is the immediate trading commencement following approval. While all 11 Bitcoin ETFs began trading the day after approval as they were granted Form S-1 permission, the debut of a spot Ethereum ETF on exchanges may take weeks or even months. This delay is because ETF filers for Ethereum have yet to receive S-1 registration from the SEC, indicating a procedural difference between the two approval processes.
