SEC Approves Ethereum ETF, Crypto Market Welcomes Historic Breakthrough

In the early hours of May 24th, the U.S. Securities and Exchange Commission (SEC) unexpectedly approved the application for an Ethereum spot ETF, a decision that has excited the crypto market. This approval involves the 19 b-4 forms submitted by several well-known institutions, including some large asset management companies. However, the formal listing and trading of the ETF still requires the S-1 registration statement to become effective, a process that may take several weeks.

Industry analysts say this decision is surprising, as just recently, the market widely expected the SEC to postpone or deny these applications. This sudden shift is believed to be influenced by political factors. It is worth noting that although the 19 b-4 forms have been approved, the SEC has just started discussions with issuers regarding the S-1 forms, which may require multiple revisions.

Currently, several institutions have quickly submitted revised S-1 application forms. Other potential issuers also include several well-known asset management companies and cryptocurrency investment institutions.

This approval marks a key step towards the official listing of the Ethereum spot ETF, and for ETH, which is the second largest encryption currency, this is undoubtedly a milestone moment. It also reflects the trend of further integration between the crypto market and traditional finance.

SEC's attitude has turned 180 degrees

This approval is a result of a dramatic shift in the SEC's attitude. After approving the spot Bitcoin ETF earlier this year, the SEC seemed to have little interaction with Ethereum ETF issuers. Market expectations once fell to quite low levels.

However, there has been a significant change in recent circumstances. The SEC suddenly began communicating with issuers, requesting the resubmission of the 19b-4 form. The speed of this shift even caught some departments within the SEC by surprise. Sources indicate that this unprecedented situation may carry evident political implications.

It is worth noting that several institutions have recently amended their ETF applications by removing content related to staking. Some analysts believe that this may reflect a subtle balance in the SEC's regulatory stance: that is, ETH itself may not be considered a security, but staked ETH might be deemed a security.

The political factors of the US election year may be an important reason driving the approval of the Ethereum spot ETF, which also reflects the overall shift in the US attitude towards crypto regulation. Recently, the US government has shown an unprecedented friendly stance towards the crypto market, including passing some bills favorable to the development of the crypto industry.

Nevertheless, analysts expect that the Ethereum ETF may struggle to reach the attractiveness level of the Bitcoin ETF. Estimates indicate that the Ethereum ETF could capture 10% to 15% of the asset scale of the Bitcoin ETF, approximately 5 to 8 billion USD.

The Journey of Ethereum Integrating into Traditional Financial Markets

Looking back at the journey of Ethereum entering the traditional financial market, we can see the following important milestones:

• February 2021: A certain commodity exchange launched Ether futures.
• May 2023: Multiple institutions submitted and subsequently withdrew Ether futures ETF applications.
• July/August 2023: Ether futures ETF applications reemerge
• August 2023: A certain cryptocurrency investment company won a lawsuit against the SEC, paving the way for ETF approval.
• September 2023: Multiple institutions began applying for spot Ether ETF.
• October 2023: Six Ether futures ETFs start trading in the United States
• March 2024: A certain encryption asset management company applied for a spot Ether ETF and provided a correlation analysis.
• April 2024: A blockchain technology company sues the SEC, questioning its practice of regulating Ether as a security.

Today, with the SEC approving the Ethereum ETF, its official listing and trading have entered the countdown phase. This development will undoubtedly bring new opportunities and challenges to the crypto market.