SEC approves Ethereum ETF application, crypto market welcomes major breakthrough

Amid widespread market expectations of a delay or rejection, the U.S. Securities and Exchange Commission (SEC) officially approved the application for the Ethereum ETF at 5:00 AM Beijing time on May 24. This decision marks a critical step in the listing process of the Ethereum spot ETF, representing a milestone moment for ETH, the second-largest encryption currency, and also signifies an important point for the integration of the crypto market into traditional finance.

Specifically, the SEC approved the 19 b-4 forms for Ethereum spot ETFs, which include several well-known institutions. However, ETF issuers still need to wait for their S-1 registration statements to become effective before they can officially begin trading. The SEC has just begun discussions with issuers regarding the S-1 forms, and this process may require multiple revisions, with the exact duration still unclear. Some analysts speculate that it may take several weeks. Notably, a well-known issuer has promptly submitted a revised S-1 application form.

The introduction of this approval decision has surprised the market. Just a week ago, most people thought it unlikely that the SEC would approve these ETF applications. However, the situation has dramatically changed in the last few days. The SEC suddenly began to actively communicate with the issuers, requesting the 19b-4 forms to be withdrawn and resubmitted, a move believed to be driven by political factors.

The political environment in the year of the U.S. presidential election may be an important factor driving the approval of the Ethereum spot ETF, which also reflects a shift in the U.S. attitude towards crypto regulation. Recently, the U.S. government has released unprecedented friendly signals towards the crypto market. For example, the U.S. House of Representatives passed the "21st Century Financial Innovation and Technology Act," which will transfer regulatory authority over digital currencies from the SEC to the relatively more friendly Commodity Futures Trading Commission (CFTC). In addition, the U.S. Senate has also overturned the SAB 121 rule, and these initiatives are seen as favorable for the crypto industry.

Nevertheless, industry experts expect that the Ethereum ETF may struggle to reach the attractiveness level of the Bitcoin ETF. Some analysts estimate that the Ethereum ETF could capture about 10% to 15% of the asset size of the Bitcoin ETF, which is approximately 5 to 8 billion dollars.

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

• February 2021: The Chicago Mercantile Exchange launched Ether futures.
• May 2023: Multiple institutions submitted and subsequently withdrew Ether futures ETF applications.
• July/August 2023: Ether futures application resubmitted
• August 2023: A well-known institution 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 begin trading in the United States.
• March 2024: A certain asset management company applied for a spot Ether ETF, accompanied by detailed research content.
• April 2024: Major industry organizations sue the SEC, questioning its practice of treating Ether as a security.

With the SEC's approval for the Ethereum ETF, the countdown to the official listing and trading has begun. This decision not only marks a significant breakthrough for Ethereum in the traditional financial sector but also suggests that the crypto market may be on the brink of a new round of development opportunities.