May 24 (Reuters) - In a historic move, the U.S. Securities and Exchange Commission (SEC) approved rule changes late Thursday to facilitate the launch of spot Ethereum ETF products. This decision marks the penultimate step before these groundbreaking funds hit major U.S. exchanges.
Key Developments:
- SEC's surprise approval: The regulator greenlit 19b-4 forms for eight Ethereum ETF applicants including VanEck, BlackRock, and Fidelity
- Final hurdle remaining: Issuers must now get S-1 registration statements approved, though no official timeline exists
- Market reaction: ETH price surged 20% this week - its best performance since 2021
Market Potential and Concerns
While optimism runs high, questions remain about whether Ethereum ETFs can match the spectacular debut of Bitcoin ETFs in January:
| Metric | Bitcoin ETF Performance | Ethereum ETF Projections |
|---|---|---|
| AUM (4 months) | $57B | $15-$30B (estimates) |
| Price Impact | +50% in 30 days | Potential +60% (to $6K) |
| Public Recognition | High | Moderate |
Analyst perspectives:
"Ethereum's market cap being smaller than Bitcoin's, coupled with lower mainstream awareness, may limit inflows," noted Lara Crigger, VettaFi research analyst.
The Rocky Road to Approval
Just last week, most market observers expected SEC rejection. The dramatic reversal stunned industry veterans:
Key approval factors:
- Strong ETH spot-futures correlation (85% vs Bitcoin's 80%)
- Coinbase research demonstrating robust price convergence
- Political pressure post-Bitcoin ETF success
- Regulatory timeline:
2021 ➔ ETH futures launch
2023 ➔ Spot Bitcoin ETF approval
2024 ➔ ETH ETF breakthrough
Future Outlook
QCP Capital predicts ETH could reach $6,000 post-ETF launch, mirroring Bitcoin's 2024 trajectory. Institutional adoption through ETFs may:
- Enhance market liquidity
- Reduce volatility
- Legitimize Ethereum's utility beyond speculation
FAQs
Q: When will Ethereum ETFs start trading?
A: Experts estimate 2-4 weeks for final S-1 approvals, potentially launching by mid-June.
Q: How does Ethereum ETF differ from Bitcoin ETF?
A: While structurally similar, ETH represents smart contract platform value vs BTC's digital gold narrative.
Q: What percentage of crypto funds might flow into ETH ETFs?
A: Analysts project 25-40% of Bitcoin ETF volumes initially, growing as institutional comfort increases.
👉 Discover how institutional crypto adoption is reshaping markets
The approval signals regulators' growing acceptance of crypto innovation. As Rich Rosenblum of GSR Markets observed: "This marks one of the most remarkable turnarounds in my 12-year career." With the final paperwork imminent, the financial world awaits Ethereum's next chapter.