SEC Likely to Approve Ethereum Futures ETF Proposals

Shortly after the early morning crypto market dump on August 18, the market swiftly rebounded following news that the U.S. Securities and Exchange Commission (SEC) is likely to approve several proposals for Ethereum futures ETFs.

According to sources cited by Bloomberg, the SEC is expected to greenlight a wave of Ethereum futures ETF proposals that have been flooding in recently.

The news is being hailed as a "win" for the cryptocurrency market, although specific details regarding which funds will receive SEC approval remain unconfirmed.

As reported by Coin68, since early August 2023, numerous Wall Street financial firms have submitted applications for Ethereum futures ETFs, including Volatility Shares, Bitwise, Roundhill, VanEck, Grayscale, Direxion, ProShares, and Valkyrie.

ETF Ethereum futures, as the name suggests, are investment fund products based on the trading price of Ethereum futures contracts. These products will be available to investors with accounts on U.S. stock exchanges, potentially attracting new capital flows. A more advanced form of ETFs is spot-based, where ETF funds must directly purchase and hold crypto assets. In June 2023, several Wall Street financial conglomerates concurrently filed applications to establish Bitcoin spot ETFs with the SEC, led by BlackRock, sparking optimism for a new wave of institutional investment returning to the cryptocurrency market.

With prospects high for the approval of Bitcoin spot ETFs, according to Bloomberg analysts, many believe Ethereum will also receive more favorable consideration from the SEC.

Proposals for Ethereum futures ETFs await SEC approval as of August 17, 2023. Source: Bloomberg

Previously, the U.S. Securities and Exchange Commission had only approved a series of Bitcoin futures ETFs in October 2021, which propelled BTC and ETH to their all-time highs shortly thereafter. The SEC has consistently declined applications for spot ETFs, citing concerns about market manipulation and fraud in the crypto market, which may not guarantee effective ETF operation and investor protection.

While not definitive, this news appears sufficient to prompt a mild recovery in the cryptocurrency market following the significant dump in the early hours of August 18. Ethereum, after dropping from $1,740 to $1,550 - its lowest level since March 2023, rebounded to $1,680 at the time of writing.

The 15-minute chart of the ETH/USDT pair on Binance at 09:50 AM on August 18, 2023

The world's largest cryptocurrency, Bitcoin, is currently stabilizing around $26,600 after being sold off to $25,166 due to news of SpaceX selling BTC.

The 15-minute chart of the BTC/USDT pair on Binance at 09:50 AM on August 18, 2023

The abrupt market fluctuations on August 18 have resulted in significant losses for both long and short investors, with over $1 billion worth of derivative orders burned in the past 12 hours alone.