SEC signals potential approval of spot Ethereum ETFs to exchanges, Barrons reports

SEC staff informed exchanges on Monday that they are now inclined to approve these products, pending resolution of certain comments on the applications, according to a report by Barrons.

The SEC faces a final deadline on Thursday to approve or reject a filing by VanEck for an ETF holding spot Ether. Similar deadlines for other firms, including ARK Invest, 21Shares, Grayscale Investments, Fidelity, BlackRock, and Franklin Resources, will follow in the coming months.

One person familiar with the matter indicated that the SEC provided feedback on applications to most issuers, suggesting a coordinated launch of several Ether ETFs. This approach mirrors the launch of the first spot Bitcoin ETFs in January, which helped propel Bitcoin to a 60% gain this year.

Just days ago, it seemed likely that the SEC would reject efforts by BlackRock, VanEck, and others to launch exchange-traded funds holding Ether.

The SEC has not yet approved any ETFs holding the currency itself, although ETFs holding Ether futures are permitted.

Reports of the SEC’s potential approval have already impacted the market, with Ether prices rising 23% to $3,790 and Bitcoin up 5% to $70,350 on Tuesday.

ETF approvals could open the Ether market to institutional investors and increase interest in smaller cryptocurrencies like Solana and Avalanche.

If approved, the ETFs could benefit investors in the Grayscale Ethereum Trust, which trades at a discount to the value of its Ether holdings. Grayscale is seeking to convert the trust into an ETF, which would close the discount and provide immediate returns to investors.

Bloomberg ETF analysts Eric Balchunas and James Seyffart recently increased their odds of a spot Ethereum ETF being approved in the US from 25% to 75%. Following this news, Ethereum (ETH) prices surged by 8.3%, reflecting growing market optimism about the potential approval of Ethereum ETFs by the SEC.