Cboe BZX Exchange Files for First Spot Ether ETFs in the U.S.

Ethereum ETFs
  • Spot ether ETFs could make it easier for investors to gain exposure to the digital asset without having to buy it directly.
  • The SEC has previously rejected several applications for spot bitcoin ETFs, citing concerns about market manipulation and liquidity.

Cboe’s BZX exchange has taken a major step towards launching the first spot ether exchange-traded funds (ETFs) in the U.S. The exchange filed paperwork on Wednesday for two ETFs, one tied to a product from Ark 21Shares and the other to a product from VanEck.

The exchange filed 19b-4 documents on Wednesday, formally kicking off a review process by the U.S. Securities and Exchange Commission (SEC). Once the SEC acknowledges the filings, it will start a 240-day clock for a final decision. The SEC has traditionally taken the maximum number of days possible to review applications, but has recently come under pressure to approve spot crypto ETFs.

The approval of a spot ether ETF would be a major milestone for the crypto industry in the U.S., as it would make it easier for investors to gain exposure to the digital asset without having to buy it directly. Spot ETFs track the price of the underlying asset, in this case ether, directly. Futures ETFs, on the other hand, track the price of ether futures contracts.

The SEC has previously rejected several applications for spot bitcoin ETFs, citing concerns about market manipulation and liquidity. However, the agency has recently softened its stance on crypto, and is currently reviewing an application from Grayscale Investments to convert its bitcoin trust into an ETF.

If the SEC approves the Cboe BZX exchange’s applications, it would be a major victory for the crypto industry and could pave the way for more spot crypto ETFs to be approved in the future.

The Potential Impact of Spot Ether ETFs

The approval of spot ether ETFs could have a significant impact on the crypto market. It would make it easier for investors to gain exposure to ether, which could lead to increased demand and price appreciation. Additionally, spot ETFs could help to legitimize the crypto market and attract more institutional investors.

However, there are also some potential risks associated with spot ether ETFs. For example, they could be susceptible to manipulation by large market participants. Additionally, the underlying ether market is still relatively illiquid, which could make it difficult for ETFs to track the price of ether accurately.

Overall, the approval of spot ether ETFs would be a positive development for the crypto market. However, it is important to be aware of the potential risks involved before investing in these products.

Also read: Crypto ETFs: What Are They and How Do They Work?

What to Expect Next

The SEC is expected to take several months to review the Cboe BZX exchange’s applications. If the agency approves the applications, the ETFs could be launched in early 2024. However, it is also possible that the SEC will reject the applications, or take longer than expected to make a decision.

The approval of spot ether ETFs would be a major milestone for the crypto industry in the U.S., but it is not guaranteed. Investors should carefully consider the risks and potential rewards before investing in these products.

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