Spot Ethereum ETFs have started trading in the US, bringing to fruition long awaited plans to make the second-largest crypto by market cap more accessible to investors.
The SEC gave approval to BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, and VanEck for the launch of nine ETFs:
- 21Shares Core Ethereum ETF (CETH);
- Bitwise Ethereum ETF (ETHW);
- Fidelity Ethereum Fund (FETH);
- Franklin Ethereum Trust (EZET);
- Invesco Galaxy Ethereum ETF (QETH);
- iShares Ethereum Trust ETF (ETHA);
- VanEck Ethereum ETF (ETHV);
- Grayscale Ethereum Trust (ETHE);
- Grayscale Ethereum Mini Trust (ETH).
It was reported in June that issuers were eagerly awaiting the green light to begin trading, requiring a sign-off on S-1 registration statements.
An S-1 is effectively a registration form for a new security like an ETF. But the SEC appears to have changed its stance on cryptos being securities, with a bill in progress to bring decentralized cryptocurrencies under the purview of the CFTC.
Brian Armstrong, CEO of Coinbase, commented on X: “Another huge step forward for regulatory clarity: ETH is not a security! We’ve been saying it for years and today the SEC finally made it official.”
Staking is currently not permitted. The SEC has argued in other contexts that pooled staking activities might meet the criteria of an investment contract, thereby requiring more stringent regulatory oversight.
The SEC also aims to keep these investment products straightforward, aligning with their broader strategy of ensuring that ETFs are transparent and easy for investors to understand.
Trump speech at Bitcoin conference
Donald Trump will be making a keynote speech at the Bitcoin conference in Nashville this week.
Several talks on the agenda will center around compliance, notably the impact of mining policy and regulation, exchange regulation, and the global regulatory landscape.
Trump and his running mate JD Vance are both pro-crypto. There are wide-ranging statistics on how many American own crypto, with the figure ranging anywhere from 10-40%.
“I don’t expect [Trump] will like being viewed as someone who doesn’t care about small hardworking Americans who lost money in crypto.”
Michael Brescia, CEO, Cerus Markets
But some commentators say an incoming Republican administration would face a difficult balancing act appeasing both average Americans who lost money in crypto in recent years and new allies in the industry.
“Typically, Republicans are usually for less regulation. But the crypto industry is different because there is no regulation. At this point, I don’t think anyone knows if he will pass favorable crypto regulations, or any regulations at all,” Michael Brescia, CEO, Cerus Markets, said.
“Trump won’t need to get the Peter Thiel’s of the world on his side since he can’t run again, but he does value his reputation and how he is seen. I don’t expect he will like being viewed as someone who doesn’t care about small hardworking Americans who lost money in crypto.”
Others are saying this is a major opportunity for the Democrats to win a big share of the crypto vote.
“Recent swing state polling shows that one in five registered voters view crypto as a major issue, and nearly one in two agree that they “don’t trust candidates that interfere with crypto”. Just look at the dozens of Congressional Democrats who voted to repeal SAB121 and pass FIT21 this year, or listen to their cogent arguments in favor of the liberal case for crypto, and you’ll see that there’s a massive opportunity on the left,” Jake Chervinsky, Chief Legal Officer, Variant, posted on X.
Gensler retirement speculation
Ahead of the Bitcoin conference, Markus Thielen, Founder of 10x Research, said he believes SEC Chair Gary Gensler will resign by January/February 2025, partly as a result of President Biden stepping down as the Democrat nominee.
“No credible candidate can seriously challenge Donald Trump. The November election appears to have been decided without a single vote. For Bitcoin, a pro-crypto administration will enter the White House. Historically, this meant that the SEC chair resigned when a new administration was elected, despite SEC Chair Gensler’s term ending on June 5, 2026,” he said.
Chairs usually vacate their posts when a new administration comes in. Under Trump’s last administration from 2017 to 2021, Jay Clayton was the incumbent, stepping down to make way for Gensler.
