- The SEC has approved spot Ethereum ETFs, signaling a growing acceptance of cryptocurrencies.
- However, the differences in the approval processes for Bitcoin and Ethereum ETFs have raised several questions.
- James Seyffart from Bloomberg Intelligence suggests that internal SEC dynamics and political implications are behind these distinctions.
Discover the nuances behind the SEC’s approval of Ethereum ETFs and the implications for the crypto market.
SEC Approves Spot Ethereum ETFs
The crypto-adoption wave continues to swell as the United States Securities and Exchange Commission (SEC) recently approved spot exchange-traded funds (ETFs) for Ethereum (ETH). This approval, which came through on May 23, follows the SEC’s earlier approval of Bitcoin (BTC) spot ETFs on January 11. However, a closer examination of the approval processes for these two leading cryptocurrencies reveals significant differences.
Differences in Approval Processes
Unlike the spot Bitcoin ETFs, which were approved by a vote from the SEC’s five-member committee, including Chair Gary Gensler, the spot Ether ETFs were approved by the SEC’s Trading and Markets Division. This discrepancy raises a critical question: Why didn’t SEC Chair Gary Gensler vote on the ETH ETF? Does he still consider Ether a security rather than a commodity?
Political Implications and Internal Dynamics
James Seyffart, a research analyst at Bloomberg Intelligence, addressed this question by implying that broader political implications and the SEC’s internal dynamics are the primary reasons behind this distinction. On May 24, he tweeted that the approval was issued through delegated authority, a common practice that leaves ambiguity about individual positions as there aren’t any public commissioner votes to see. He further added that even though the approval is final for now, SEC Commissioners like Crenshaw could still request a review.
Market Reactions and Community Sentiments
The differences in the approval processes did not go unnoticed among the crypto community, especially given ETH’s lackluster performance on the charts immediately after the approval. In contrast, following the approval of the BTC ETF, Bitcoin’s price surged from just below $46,000 to around $47,500. Meanwhile, ETH saw an 11% hike, surpassing $2,500 for the first time in 20 months. However, the market reaction was quite different after the approval of the ETH ETF. On May 24, Bitcoin, along with various other altcoins including Ethereum, registered significant declines on the charts.
Gensler’s Stance on Cryptocurrencies
As expected, speculation continues regarding Gensler’s voting approach during the BTC ETF approval and his absence from the vote for the ETH ETF. His history of anti-crypto positions suggests that he favors neither Bitcoin nor Ethereum. This sentiment was echoed in a recent remark he made, “Crypto is a small piece of our overall markets. But, it’s an outsized piece of the scams and frauds and problems in the markets.”
Conclusion
The SEC’s approval of spot Ethereum ETFs marks a significant milestone in the crypto market, yet it also highlights the complexities and internal dynamics within regulatory bodies. While the approval signifies a growing acceptance of cryptocurrencies, the differing processes for Bitcoin and Ethereum ETFs raise important questions about the future regulatory landscape. As the market continues to evolve, stakeholders will be keenly watching for further developments and potential reviews by SEC Commissioners.
