VanEck has received regulatory approval for its Ethereum ETF application. The firm filed for the application in 2021 and recently secured approval from the Securities and Exchange Commission.
Approval of Spot Ethereum ETFs
The approval of spot Ethereum ETF has been marked as a major milestone for the sector. The Notice of Effectiveness of ETF was filed on 22nd July and set to get a listing soon. However, the journey leading up to the approval was paved by a series of filings and amendments sent to the SEC.
The firm has also talked about the tiresome duration characterized by regulatory scrutiny. Lennix Lai, the Chief Commercial Officer at OKX, noticed that the approval of Ethereum ETF has dispelled any probability of Ethereum to face regulatory scrutiny as a security. He further stated that the major approval also sets a legal precedent for Proof-of-Stake (PoS) tokens.
VanEck filed for the application in May 2021. The platform extended efforts to conform to regulatory standards required for approval. Eventually, the firm filed a S-1 form to get a registration with the SEC.
The form is considered the final listing with the SEC and when approved the firm is ready to launch their ETF on a traditional stock market. SEC has mandated the S-1 form for firms that are offering first public security offering as a final offering declaration.
VanEck Amended the S-1 Filing to Secure Listing
In a July 8th filing, VanEck edited S-1 filing with the SEC to finalize the listing process of spot Ethereum ETF. At the final stage, the SEC ETF approval process crypto investment firms 21Shares amended and received final approval from the Securities and Exchange Commission.
These firms have not included the official launch date on an exchange platform but retained that Ethereum ETFs will be launched as soon as possible after the effective date.
During the same duration, Grayscale confirmed listing two spot Ethereum ETFs on NYSC Arca as of 23rd July 2024. The debut of Grayscale ETFs was followed by the SEC decision to finalize the approval of the application that allowed a number of investors to launch products for trading.
As of 22nd July 2024, Grayscale sent $1 billion in ETH to Coinbase as part of the launch process for spot ETFs. The firm moved 292,263 ETHs as per Ethereum Mini Trust in a 18th July filing.
BlackRock head of digital assets Robert Mitchnick noticed that there is not much scope in digital asset ETFs outside of Bitcoin and Ethereum.
He further stated that the overwhelming interest of investors is leaning towards Bitcoin and then Ethereum. However, beyond these two asset classes, there is very little demand.
Bitcoin ETFs Vs Ethereum ETFs
Another asset management firm Franklin Templeton has stated that investors may pour money into other digital asset-backed ETFs. However, Mitchnink retained that store of value utility within the digital asset sector is primarily a territory for Bitcoin.
Ethereum has a number of different applications that Bitcoin does not intend to integrate. The executive projected that investors are likely to allocate more than 19% of holdings in Ethereum and the remaining are allocated to Bitcoin.
BlackRock further stated that ETFs are some of the most popular crypto products. Bitcoin dropped 20% in terms of daily active addresses during 2nd quarter of 2024.
The layer-2 protocol posted a 127% increase for these addresses in the first half of the ongoing year. The on-chain activity for the year indicates that Ethereum reported a major price hike in terms of active investors and other factors.
For the first half of 2024, the daily average active addresses on Ethereum and major layer-2 platforms increased by 127% for Q3 as per Coinbase Institutional and Glassnode. This layer-2 blockchain shared the aim to accelerate the transaction speed while retaining network commissions and fees economic for layer-1. Layer-2 has activated low-cost transactions after parallel blockchain verifications.
