Regulation
The SEC may approve Ether ETFs to avoid a legal battle
Wed 05 Jun 2024 ▪ 3 minute read ▪ by Fenelon L.
Contrary to rumors suggesting a politically motivated decision by the SEC to approve Ether spot ETFs, Bernstein analysts believe the regulator instead acted to avoid potential legal challenges. This decision seems to give a strong boost to the cryptocurrency sector.
A decision based on legal rather than political considerations
Analysts Gautam Chhugani and Mahika Sapra of Bernstein dispute the theory of a political maneuver by Democrats behind the SEC Approval of Ethereum ETFs ahead of the mid-term elections.
According to them relationshipthe SEC knew it could not reject applications for Ether ETFs given the similar regulatory structure to previously approved Bitcoin ETFs.
With Ether futures products listed and a close correlation between spot and derivatives markets, rejecting Ether ETFs would have exposed the SEC to potentially adverse litigation. The presidential veto on the repeal of a fundamental accounting bulletin by the authority supports this hypothesis of a purely regulatory decision.
“The SEC has undoubtedly adopted a pragmatic approach to avoid a judicial clash”, conclude the analysts, underlining the candidates’ surprise at the unexpected green light.
An important development despite the timid beginnings
While Bernstein welcomes this major advancement for the cryptocurrency industry, the firm tempers initial expectations. Compared to the very popular one Bitcoin ETFsNew Ether-indexed products are expected to initially attract less capital.
However, analysts predict “pent-up demand from institutional investors themselves” and a Ether price appreciation before its actual launch. A positive picture that confirms the importance of this milestone for the sector.
The final step will be SEC approval of registration statements filed by issuers like VanEck, Black rock or Loyalty.
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Fenelon L.
Passionate about Bitcoin, I want to explore the meanings of blockchain and cryptocurrencies and participate in my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.