By
Svetlana Soroka
June 14th, 2024
The anticipation of spot Ether ETF approvals has had a profound impact on the Ethereum market value.
BlackRock, Grayscale, and Bitwise have filed amended 19b-4 forms with the US Securities and Exchange Commission (SEC) for their proposed spot Ethereum Exchange Traded Funds (ETF). These updates, made on Wednesday, specifically remove provisions related to staking Ether, which some believe was a regulatory stumbling block.
Removal of Staking Provisions
The removal of staking provisions appears to be a strategic move to avoid potential regulatory hurdles. Staking, a common method of earning passive income in the cryptocurrency world, involves participating in Ethereum’s proof-of-stake validation process to earn additional ETH. The amended filings now explicitly state that none of the entities associated with the trusts will engage in staking activities.
“Neither the Trust, nor the Sponsor, nor the Ether Custodian […] nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings,” the revised BlackRock filing notes.
Regulatory Developments and Market Reaction
Market observers have noted a sudden shift in the SEC’s stance. Previously, the SEC appeared not to be considering the approval of an ETH ETF. James Seyffart, Bloomberg’s popular research analyst, in an interview with Unchained, suggested that the issue had become “political,” with the decision likely influenced by higher levels of government, possibly even by President Biden.
On Monday, Bloomberg analysts Eric Balchunas and James Seyffart updated their odds of approval for these ETFs to 75%, a significant increase from the previous 25%. This optimistic outlook caused a notable surge in the market, with Ether rising over 17% and Bitcoin reclaiming the $71,000 mark for the first time since early April.
The Depository Trust and Clearing Corporation (DTCC) has already listed VanEck’s Ether ETF under the ticker symbol ETHV on its website, which many interpret as a positive regulatory signal.
The Broader Market Impact of Possible Ethereum ETF Approval
The anticipation of spot Ether ETF approvals has had a profound impact on the Ethereum market value. Bernstein, a $725 billion asset manager, has predicted that ETH could rally to a new all-time high of $6,600 following the approval of these ETFs. This sentiment is echoed across the market as investors and analysts alike recognize the potential for substantial growth.
The rush of updated filings by leading asset managers reveals the competitive nature of the ETH ETF race. By addressing regulatory concerns head-on and adapting to SEC requests, these firms are positioning themselves to capitalize on what could be a transformative moment for Ethereum and the broader cryptocurrency market.
Adding to the regulatory developments, the US House of Representatives has recently voted in favor of the Financial Innovation and Technology for the 21st Century Act (FIT21). This legislation, if enacted, could reshape the regulatory framework for digital assets in the United States, potentially impacting the landscape for cryptocurrency investments and market operations.