Second largest cryptocurrency: US Securities and Exchange Commission allows Ether ETFs

Second largest cryptocurrency
US Securities and Exchange Commission allows Ether ETFs

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After ten years, the SEC approved trading in Bitcoin ETFs in January. Now it is paving the way for the second-largest cryptocurrency in exchange-traded funds. This should attract more buyers to the digital currency.

The US Securities and Exchange Commission (SEC) has basically cleared the way for exchange-traded funds (ETFs) with the cryptocurrency Ether. The SEC has allowed the technology exchange Nasdaq and the New York Stock Exchange, among others, to trade in such financial products. In order to set up such funds, however, interested providers such as Blackrock and Fidelity still need individual approval from the authority, according to an SEC announcement.

Ethereum 32.68

No deadline has been set for this at first. They have been approved for the best-known digital currency, Bitcoin, since January. The approval of the Bitcoin spot ETFs was already seen as an important milestone in bringing digital currencies more into the financial mainstream. Investing in such funds instead of directly in crypto money is a lower hurdle for many investors.

Ether is the second most important digital coin after Bitcoin, but the stock exchange regulator’s decision came as a surprise to many. Due to the lack of communication between applicants and the authority, many analysts assumed that the SEC would reject the applications. Shortly before the application deadline, however, the regulator then decided in favor of it.

SEC had to approve Bitcoin ETF

The SEC under its head Gary Gensler is generally rather skeptical about cryptocurrencies and for ten years refused to allow spot ETFs. It did not voluntarily give approval for Bitcoin in January. Last year, the supervisory authority suffered a defeat in court after rejecting an application from Grayscale.

An appeals court found the decision was arbitrary because the SEC did not clearly distinguish it from other approved investments. ETFs on Bitcoin futures contracts had already been approved in 2021.

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