Key Points
- The SEC has approved Ethereum spot ETFs, signaling a rise in crypto acceptance.
- Notable differences exist in the approval processes for Bitcoin and Ethereum ETFs, leading to questions.
The recent approval of Ethereum spot exchange-traded funds (ETFs) by the United States’ Securities and Exchange Commission (SEC) indicates a growing acceptance of cryptocurrencies.
The approval was granted on 23 May, about five months after the SEC approved Bitcoin spot ETFs on 11 January. However, the approval methods for these two cryptocurrencies show significant differences.
Approval Processes
Unlike the Bitcoin ETFs, which were approved by a vote from the SEC’s five-member committee, including Chair Gary Gensler, the Ethereum ETFs were approved by the SEC’s Trading and Markets Division.
This brings up a critical question: Why didn’t SEC Chair Gary Gensler vote on the Ethereum ETF? Does he still view Ether as a security rather than a commodity?
James Seyffart, a research analyst at Bloomberg Intelligence, suggested that broader political implications and the SEC’s internal dynamics are the main reasons for this difference. He highlighted that the approval was granted through delegated authority, which, although common, leaves ambiguity about individual positions as there are no public commissioner votes to observe.
Seyffart also noted that SEC Commissioners like Crenshaw could still ask for a review, even though the approval is currently final.
Market Reactions
The differences in the approval processes were also reflected in the price actions of both cryptocurrencies. Following the Bitcoin ETF approval, Bitcoin’s price increased from just under $46,000 to around $47,500. In contrast, Ethereum saw an 11% increase, exceeding $2,500 for the first time in 20 months.
However, the market reaction was quite different after the Ethereum ETF approval. On 24 May, several altcoins, including Bitcoin and Ethereum, experienced significant declines.
Speculation continues regarding Gensler’s voting approach during the Bitcoin ETF approval and his absence from the Ethereum ETF vote. His history of anti-crypto positions suggests that he does not favor either Bitcoin or Ethereum.
