It appears increasingly likely that a spot ether exchange-traded fund (ETF) could be introduced as early as this week, following a surprising shift in stance by the U.S. Securities and Exchange Commission (SEC), prompting crypto investors to ramp up their expectations.
Analysts believe that the approval of an ETF tracking ether could propel the cryptocurrency’s price to new heights and potentially catalyze greater institutional adoption of other digital assets.
According to analysts at QCP Capital, if the SEC gives the green light to an ether ETF this week, the token could see a short-term rally to $4,000 and potentially surge as high as $5,000 later this year. Ether, the second-largest cryptocurrency by market capitalization, previously reached a record high of $4,865.81 in November 2021.
On Tuesday, ether experienced a 6.7% increase, reaching around $3,736, marking a 63.4% increase year-to-date.
Previously, there was skepticism within the crypto industry regarding the approval of an ether ETF, partly due to the SEC’s lack of engagement on the matter. However, recent developments suggest a shift in the regulator’s stance.
Reports indicate that on Monday, the SEC instructed major exchange operators Nasdaq, Cboe, and the New York Stock Exchange to revise their applications for spot ether ETFs. This move signals a potential inclination towards approving such products. The SEC faces final deadlines by the end of the week to decide on ether ETF applications submitted by VanEck, Ark Invest, and 21Shares.
Representatives from Nasdaq, Cboe, and NYSE did not provide comments in response to requests for clarification.
The last-minute directive to the exchanges may indicate a shift in the SEC’s approach, potentially aiming to expedite the approval process, suggested Alexander Blume, chief executive and co-founder of Two Prime, a digital asset investment advisor.
If an ether ETF is approved, it could signify a more favorable regulatory environment for digital assets in the U.S. and underscore heightened institutional interest in cryptocurrencies, according to Chris Kline, chief operating officer and co-founder of Bitcoin IRA.
Moreover, the approval of ether ETFs could pave the way for similar investment products tracking other cryptocurrencies, expanding the scope of crypto ETF offerings and potentially influencing the regulatory treatment of various blockchain networks and associated tokens. This could have significant implications for the broader crypto market and its integration into traditional financial systems.