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SEC Takes Step Toward Approval of Ethereum ETFs

Ethereum ETFs from BlackRock, Grayscale and others are one step closer to being available on the NYSE Arca, Nasdaq and Cboe BZX exchanges.

The Securities and Exchange Commission has approved the exchange applications to list and trade eight Ethereum ETFs, in a significant step toward getting the spot funds for the second largest cryptocurrency on the market.

The commission approved proposals from the NYSE Arca, the Nasdaq and Cboe BZX Exchange to list and trade shares of the Grayscale Ethereum Trust, the Bitwise Ethereum ETF, the iShares Ethereum Trust, the VanEck Ethereum Trust, the ARK 21Shares Ethereum ETF, the Invesco Galaxy Ethereum ETF, the Fidelity Ethereum Fund and the Franklin Ethereum ETF.

The regulator approved them “on an accelerated basis,” according to an SEC notice filed on the commission website this afternoon. 

Thursday’s approval does not necessarily mean the ETFs themselves have the green light, although it removes a key hurdle, Bloomberg reports. The issuers still need the regulator to sign off on their individual proposals, and no date has been set for that.

The price of Ethereum was up about 2% Thursday on the SEC news to $3,816 by 6:30 p.m. Eastern time.

This follows the commission’s approval in January of 11 spot Bitcoin ETFs.

Several RIAs took large positions in spot Bitcoin ETFs during the first quarter in the months after the SEC approved the vehicles in January, according to recent quarterly 13-F filings. That included Legacy Wealth Asset Management, a Woodbury, Minn.-based RIA with 398 clients and $394 million in AUM, and Quattro Financial Advisors, a Woodlands, Texas-based multifamily office with $988.8 million in AUM.

Hightower also purchased stakes worth a combined $68 million in six spot Bitcoin ETFs, according to its 13-F.

The moves are notable given the initial hesitancy by some RIAs to spot bitcoin ETFs after they were initially approved. The positions also represent some of the largest single investments in any of the 11 spot bitcoin ETFs since their launches. 

Through April 23, the 11 spot bitcoin ETFs have posted $12 billion in net inflows, according to Aniket Ullal, vice president of ETF data and analytics with investment research firm CFRA. However, when the outflows tied to Grayscale Bitcoin Trust ETF (GBTC) are taken out of the equation, the other ETFs in the sector saw $28 billion in inflows. While CFRA doesn’t track where the inflows are coming from, market insiders say most of the allocations are from the retail channel, Ullal noted.

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