Breaking News: Ethereum ETFs Get the Green Light
On May 24th at approximately 5 AM Beijing Time, the U.S. Securities and Exchange Commission (SEC) approved 19b-4 forms for eight spot Ethereum ETFs from prominent issuers including Grayscale, Bitwise, iShares, VanEck, ARK & 21Shares, Invesco & Galaxy, Fidelity, and Franklin. This landmark decision marks a significant step forward for cryptocurrency adoption in traditional finance markets.
The approval process created such anticipation that the SEC website experienced multiple crashes due to heavy traffic. According to industry reports, the SEC had earlier this week requested exchanges to expedite updates to their 19b-4 applications, with all eight issuers submitting final revised versions before the deadline (excluding Hashdex).
Key Timeline:
- 19b-4 Forms Approved (May 24)
- S-1 Registration Statements Pending (Next regulatory hurdle)
- Projected Launch Date (TBD after S-1 approvals)
Critical Differences: Ethereum vs. Bitcoin ETFs
No Staking Rewards in Approved ETFs
Unlike their Bitcoin counterparts, these pioneering Ethereum ETFs won't include staking functionality—a crucial concession made to secure SEC approval. VanEck set this precedent back in February by submitting the first amended S-1A registration statement explicitly excluding staking provisions.
Why This Matters:
👉 Ethereum's Proof-of-Stake mechanism normally allows ~3% annual yields through staking, which would have given these ETFs a unique advantage over Bitcoin products. However, the SEC's position that staking-as-service products constitute unregistered securities made this feature untenable for regulated ETFs.
Market Impact Analysis
Financial institutions have released varied projections about the potential effects:
| Institution | ETH Price Prediction | Inflow Estimate |
|---|---|---|
| Standard Chartered | $8,000 by EOY 2024 | 2.4M-9.2M ETH |
| Bernstein | $6,600 (75% surge) | N/A |
| QCP Capital | $5,000 long-term | N/A |
Global Regulatory Contrast: Hong Kong's Progressive Stance
While U.S. ETFs forgo staking, Hong Kong's Securities and Futures Commission is actively considering allowing staking for local spot Ethereum ETFs. This potential policy difference could make Asian-listed products more attractive to yield-seeking investors.
Looking Ahead: What Investors Should Know
- Launch Timeline: Expect weeks/months before trading begins as S-1 approvals progress
- Volume Expectations: Initial trading likely smaller than Bitcoin ETFs
- Investment Considerations: Direct ETH ownership may appeal more to those seeking staking rewards
FAQ Section
Q: When will these ETFs start trading?
A: Trading commences after S-1 approvals, typically taking weeks to months post 19b-4 clearance.
Q: Why are staking rewards excluded?
A: The SEC considers staking services potential unregistered securities offerings based on recent enforcement actions.
Q: How might this affect Ethereum's price?
A: Analysts predict short-term targets between $4,000-$6,600, with some seeing $8,000 by year-end.
Q: Should I buy the ETF or actual ETH?
A: ETF advantages include regulatory oversight and traditional market access, while direct ownership allows staking participation.
Q: Will Grayscale's ETH Trust convert like GBTC did?