Spot Ethereum ETFs approved
The US Securities and Exchange Commission (SEC) has approved the first spot Ethereum ETFs, allowing investors to invest directly in Ethereum without owning the cryptocurrency itself. This approval, which was unexpected as previously the probability was estimated at 25%, marks a significant shift as just days before the approval, analysts had raised their forecasts to a 75% chance of success.
Debates about Ethereum
The decision comes amid debates about whether Ethereum should be considered a security or a commodity, with recent developments suggesting it is increasingly being treated as a commodity.
Approval process and regulation
However, the approval process of these ETFs is not yet complete as the S-1 documents still need to be approved, which could take additional weeks. This change follows a broader movement in regulation highlighted by the recent passage of the Financial Innovation and Technology Act (FIT 21) in the House of Representatives. This bill aims to clarify the legal framework for digital assets, define the regulatory roles between the SEC and the Commodity Futures Trading Commission (CFTC), and establish what constitutes a digital asset.
Future classification and legislation
Despite the positive developments in the House, Ethereum's future classification under FIT 21, whether as a security or a commodity, remains up in the air, depending on the bill's passage in the Senate and potential approval by President Biden. This ongoing legislative process reflects an increasingly positive attitude toward cryptocurrency regulation in the U.S., as evidenced by U.S. Senator Cynthia Lummis' remarks about building a "pro-crypto army" in Congress.