Bitcoin
Ether cryptocurrency ETFs are approved by the SEC
Federal regulators on Thursday approved an investment product linked to the cryptocurrency Ether, the most valuable digital asset after Bitcoin, in a major boost for the crypto industry.
The Securities and Exchange Commission said a group of exchanges could begin listing investment products known as exchange-traded funds, or ETFs, tied to the price of Ether. The products would offer an easier and simpler way for people to invest in cryptocurrencies, potentially increasing prices and promoting wider adoption of digital currencies.
In January, the SEC similar approved products that track the price of Bitcoin, leading to a flood of new investments that helped drive Bitcoin price to record high.
The impact of Ether approval may take longer to reach the market. Before exchanges can begin offering Ether ETFs, the SEC must also approve a separate set of applications from companies wanting to issue them, including from major financial firms like BlackRock and Franklin Templeton. This process can take weeks or months, depending on your finances. experts.
An SEC spokeswoman said the agency had no comment beyond a formal order approving the products.
The news sparked celebration in the crypto industry. A representative from 21Shares, one of the companies looking to offer the Ether investment product, called it an “exciting time for the broader industry.”
But industry critics called the approval a dangerous development that would encourage broader investment in a volatile market.
“The SEC has failed to fulfill its mission to protect investors and the markets,” said Benjamin Schiffrin of Better Markets, a nonprofit that fights for stricter financial regulations. said in a statement.
Offered by major financial services companies, ETFs are essentially baskets of assets – rather than purchasing the assets directly, clients purchase shares in these baskets. The products are easy to trade, in brokerage accounts from companies like Vanguard or Charles Schwab, and are popular with wealth advisors and other money managers.
In the crypto world, ETFs offer another important advantage: simplicity. Instead of navigating the intricacies of an online crypto wallet, a customer could go online and purchase shares of a Bitcoin or Ether ETF alongside stocks traded on Wall Street.
For years, crypto advocates have seen these products as a promising way to encourage broader use of digital currencies. Before the approval of Bitcoin ETFs, crypto companies fought the SEC in court, securing a legal victory in August that forced the agency to allow the products.
Bitcoin ETFs have proven to be extremely popular, attracting billions of dollars in investment.
The price of Ether has recovered in recent months following a crypto crisis that began in 2021. Ether currently negotiations at around $3,800 per coin, more than 20% below its high of just under $4,900.
That’s a small fraction of the price of Bitcoin, which trades at around $68,000 per coin.