Six months after introducing the Bitcoin ETF, the SEC has given the green light for the Ethereum ETF to trade on exchanges.
- The SEC approved the first Ethereum ETF, a significant milestone for Ethereum and the crypto industry.
- Certification shows rising institutional adoption and gives investors direct access to Ethereum.
- Ethereum’s cost had a humble reaction after the news. It is presently trading at approximately $3,475.
Ethereum ETFs can now trade in the US after receiving formal approval.
The Securities and Exchange Commission (SEC) has allowed the first-ever Ethereum exchange-traded fund (ETF), following in the footsteps of Bitcoin.
The approval of this ETF is a huge step for Ethereum and the digital asset market, signaling greater institutional acceptance and wider adoption.
Spot Ethereum ETF to Begin Trading Today
The spot Ethereum ETF will begin trading on Tuesday, as confirmed by companies such as VanEck, Bitwise Asset Management Inc., BlackRock Inc., Invesco Ltd., Franklin Templeton and 21Shares. By introducing a regulated financial product, investors can now invest directly in Ethereum, bringing increased liquidity and investment into the market.
This development results from consistent efforts to get licenses for Ethereum ETFs–a route that Bitcoin ETFs have previously taken. Both the retail and institutional sectors have made large investments in Bitcoin ETFs since January.
Despite these achievements, Ethereum’s market reaction was unexpectedly cool, with a price drop of 1.32%. This loss occurred immediately after the release, a typical ‘news sell-off’ effect, with the price momentarily dropping to $3,422 and then recovering to around $3,475. Given the severity of the SEC’s decision, this mild reaction surprised many investors and analysts.
Ethereum Price Performance. Source: BeInCrypto
According to Matteo Greco, research analyst at Financial, who spoke to BeInCrypto, the ETF is likely to see an early withdrawal, which would increase selling pressure.
“It’s crucial to note that Grayscale Ethereum Trust (ETHE), which has been trading for years with no redemption alternatives for investors, may witness net outflows comparable to those seen with Grayscale Bitcoin Trust (GBTC) when BTC Spot ETFs started. ETHE will be a different product from the new Grayscale ETH Spot ETFs (Ethereum Mini Trust), and early large withdrawals from ETHE may balance net inflows to the new products, similar to the pattern seen with BTC in January,” Greco told BeInCrypto.
In related news, Spot on Chain revealed a notable transaction by an Ethereum whale, 0xf26. This investor funded Binance with 8,762 ETH, worth approximately $30.34 million.
