The US Securities and Exchange Commission (SEC) has just… consent The first batch of Ethereum (ETH) ETFs. These ETFs could have significant impacts across financial markets, given the popularity of the asset and the recognition that spot Bitcoin ETFs have been the fastest growing ETFs in the history of ETFs, According to to BlackRock CEO Larry Fink.
JUST IN: 🇺🇸 SEC Approves Ethereum ETFs. pic.twitter.com/t7KLtcaMNg
– Bitcoin Magazine (@BitcoinMagazine) May 23, 2024
The newly approved spot ETFs will allow investors to gain direct exposure to Ethereum, the second-largest cryptocurrency by market cap, without having to purchase and store the digital assets themselves.
“To be clear: This doesn't mean they'll start trading tomorrow. This is just 19b-4 approval. They also have to get approval for the S-1 documents which will take some time,” said James Seyphart, a Bloomberg ETF analyst. Comment In the news. “We expect it to take a few weeks but it could take longer. We should know more in a week or so!”
The rapid change in the odds of approval for these ETFs shocked everyone last Monday, when Bloomberg analysts Eric Balchunas and James Seyfart said… Starch Their approval rate ranges from 25% to 75%. “I heard chatter this afternoon that the SEC might do a 180 on this (increasingly political issue), so everyone is scrambling now (like us, everyone assumes they will be rebuffed),” Balchunas explained.
It's been a long time debate On whether Ethereum should be considered a security or a commodity. Critics of Ethereum claim that it passes the Howey test and should therefore be classified as a security. The Howey test consists of four criteria: investment of money, expectation of profits, joint venture, and dependence on the efforts of others. Here is a video below from 2014 of current SEC Chairman Gary Gensler explaining why he believed at the time that ETH passed the Howey test.
Friendly reminder that the current Chairman of the SEC believes Ethereum passes the Howey test. pic.twitter.com/qFKeBFdKCH
– Modern Stacker (@ModernStacker) January 20, 2023
Now due to recent regulatory developments, coupled with ETF approval, it appears that regulators are now pushing towards regulating Ethereum as a commodity.
Yesterday, the House of Representatives passed a bill to develop a regulatory framework for digital assets (HR 4763 – Financial Innovation and Technology Act 21 (FIT 21)). The bill, unlike another bill related to bitcoin and cryptocurrencies that was voted on in the House and Senate earlier this month, received positive feedback from the White House, initially saying they did not like the legislation in its current state but wanted to work with Congress to find… Solution. The resolution, and he will not veto it if it reaches President Biden's desk to be signed into law.
“Two-thirds of the House voted for clarity regarding cryptocurrencies,” Patrick McHenry, chairman of the Republican House Financial Services Committee, told CNBC today. “It creates a legal framework, and gives the SEC a proper role, and the CFTC a proper role, rather than the set of conflicting regulatory actions that these two agencies have taken over the last 10 years… It flattens what a digital asset is and gives it a framework.” It is legal to trade and buy those assets.”
#He watches: president @Patrick McHenry joins @SquawkCNBC To discuss the historic vote that the two parties took yesterday on this landmark #FIT21. Covers:
‼️ Main provisions
🔎 Clarification @Koftak against @SECGov Jurisdiction
🚂Next steps on the path to legislation📺 Don't miss this conversation 👇 pic.twitter.com/F49JjPf5tH
— Financial Services Republican Party (@FinancialCmte) May 23, 2024
If FIT 21 passes the Senate and is signed into law by President Biden, ETH could be classified as a commodity under these new guidelines, but the official outcome of this decision remains to be seen.
Congress is also currently working to “build a pro-crypto army,” According to By US Senator Cynthia Lummis subscriber Supported the House of Representatives to pass FIT 21 yesterday.
