After a long wait, the United States Securities and Exchange Commission has given a green signal for the launch of Ether ETFs. The approval for a spot exchange-traded fund for Ether, the second biggest cryptocurrency by market cap, shows how mainstream acceptance for crypto is picking up.
The ether ETFs received approval from the SEC on Monday afternoon. According to fund sponsors, trading could start as early as Tuesday. These include converting a $9.3 billion Grayscale Investments trust and new offerings from major bitcoin ETF players BlackRock and Fidelity. With a market valuation of over $415 billion, ether, the native cryptocurrency of the Ethereum blockchain, is currently the second-largest cryptocurrency worldwide behind Bitcoin.
The decision comes after the Securities and Exchange Commission approved Bitcoin (BTC) exchange-traded funds (ETFs) in January, capping a years-long process for ether ETF clearance.
Since ether can be bought and sold using typical brokerage accounts, putting the funds in an ETF wrapper may help them appeal to more traditional investors. Since their launch in January, Bitcoin ETFs have drawn tens of billions of dollars in investment.
Why are Ethereum ETFs important for crypto markets?
Bitcoin’s fame and market dominance have led to a new era of trading for Bitcoin ETFs. After their launch, the ETFs saw huge success, with both retail and institutional investors jumping on the bandwagon. However, after the launch of Bitcoin ETFs, the crypto market wondered if other blockchains could also succeed in getting their ETFs.
The approval for Ethereum ETFs will not only give a bullish cue to investors but also bring crypto trading into more mainstream limelight. The approval also gives investors a chance to look beyond Bitcoin and invest in other cryptocurrencies that are not limited. Additionally, the approval brings new regulations into the crypto markets.
Ethereum is generally akin to a tech investment, while Bitcoin might be a long-term hedge against inflation. As Bankless Times previously reported, according to Blackrock, the world’s largest asset manager with over $10.6 trillion in assets, Ethereum is currently highly important in the market.
The company’s head of themes and alternative ETFs, Jay Jacobs, stated that Ethereum’s usefulness makes it significant and valuable for market participants across the globe.
He continued by pointing out that the primary draw of Bitcoin for investors is its scarcity. There will never be more than 21 million coins. It is a rare asset since millions more coins have been lost than have been mined, totaling over 19.72 million.
