Markets
Ether rises as market turns optimistic about Ether ETF approval
Key points
- The price of Ether rose more than 20% on Tuesday, before giving back some of the gains.
- The price jump appears to be related to the improving odds of a spot ether exchange traded fund (ETF).
- Cryptocurrency markets have experienced renewed optimism over the approval of the spot ether ETF after the SEC asked exchanges to update related filings.
The price of ether (ET), which is the native cryptocurrency of Ethereum The network rallied as much as 20% on Tuesday before giving up some gains amid renewed hope for spot ether approval exchange traded funds (ETFs) by the United States Securities and Exchange Commission (SEC).
What is behind this renewed optimism?
After the success of bitcoin (Bitcoin) spot exchange-traded funds began trading in JanuaryCrypto markets wanted a similar story for ether ETFs, only to see their hopes dashed when the U.S. the regulator raised concerns on Ether’s status as a security and revisited his previous concerns about staking.
But now it appears the SEC is moving forward with the application process.
The SEC recently requested that various exchanges update their 19b-4 filings related to spot ether ETFs on an accelerated basis. CoinDesk reported. This step was also taken during the bitcoin ETF application approval process.
Another important development was Fidelity modifying its application to the Ether ETF to remove staking rewards.
Ether holders can stake or lock your tokens to participate in the transaction validation process on the Ethereum network and earn rewards for doing so.
The SEC has a problem with staking as they consider it a securities offering and have sued cryptocurrency exchanges such as Binance, CoinBaseAND Kraken, in the past for offering it as a service. Fidelity’s removal of staking from its application is seen as a move to make the regulator comfortable with the Ether ETF product.
And this has fueled optimism among investors and analysts.
On Monday, Bloomberg analyst Eric Balchunas announced an increase in his firm’s odds of 19b-4 filing approval to 75%, previously set at 25%. On the Polymarket prediction market Tuesday, the odds of approval for a spot ether ETF increased to about 60%, up from 10% the day before.
When will there be a final decision on Ether ETFs?
Short answer: maybe not anytime soon.
According to Bloomberg analyst James Seyffart, the SEC has a Thursday deadline to decide on VanEck’s 19b-4 filing. After that, it will still take weeks or months S-1 first registration approval requests and the first spot ether ETF to hit the market.
But some progress is better than none for those awaiting the first spot ether ETF. And for some, the fine print is key.
According to Van Buren Capital general partner Scott Johnsson, the removal of staking from the application was expected, but “the biggest signal is that there are no changes to the structure and disclosures of the commodity grantor trust. All the signs indicate that the SEC is making its case for ETH as a security,” he posted on X on Tuesday.