If the SEC approves ether ETFs, will it approve altcoin ETFs?

As the likelihood of the Securities and Exchange Commission (SEC) approving a spot ether ETF suddenly increases, altcoin investors are speculating on a possible wave of approvals for additional coins.

Indeed, this very morning, WisdomTree won approval from the UK’s Financial Conduct Authority to list its 100% physically backed Ethereum ETP on the London Stock Exchange as early as May 28 – although the products will not be available for retail investment.

The bullish momentum in ether, which is up 29% this week alone, could spill over to other crypto assets.

On Monday, Bloomberg ETF analysts James Seyffart and Eric Balchunas said the likelihood of the SEC approving an ether spot ETF had jumped from 25% to 75% on comments reported by the agency to at least an exchange and an ETF applicant regarding their 19b-4 exchange rule change request.

The Wall Street Journal confirmed the news while CoinDesk also quoted three people close to the case. Around the same time and without citing the 19b-4 news, David Han of Coinbase Institutional wrote a note adjusting upwards its outlook for a spot ether ETF.

Barrons claims SEC employees told the exchanges “that it is tend to approve of themaccording to people familiar with the matter.

As early as tomorrow, the SEC could approve a so-called 19b-4 filing which, alongside a related S-1 filing whose deadline is a few weeks away, could lead to a possible listing of a spot ether ETF by the investment manager VanEck.

Other ETF sponsors have also filed 19b-4 filings with the SEC for a spot ether ETF, including Fidelity, 21Shares, Invesco/Galaxy and Franklin Templeton. VanEck asked for the earliest response date: tomorrow.

Will a spot ether ETF lead to other altcoin ETFs?

Granted, ether is just one of many altcoins traded on U.S. exchanges through trusts. There are more than a dozen publicly traded trusts in the United States holding alternative crypto assets: Litecoin (LTC), Chain link (LINK), Basic Attention Token (BAT), Bitcoin Cash (BCH), Decentralized country (MANA), Ethereum Classic (ETC), Filecoin (SON), Peas (POINT), Horizon (ZEN), Stellar lumens (XLM), Livepeer (LPT), Zcash (ZEC), and Solana (GROUND).

So if the SEC approves a spot ether ETF, could it also approve ETFs for additional altcoins?

The logic of altcoin proponents – arguing that non-ether spot altcoin ETFs could gain SEC approval shortly after a spot ether ETF – generally follows a simple argument: if the SEC allowed Grayscale to convert its Bitcoin trust into an ETF, why would commissioners deny trusted sponsors of other crypto assets from converting to ETFs?

For obvious reasons, this argument could fail if the SEC claims that the crypto asset is an unregistered security. However, the SEC has not classified all crypto assets held in US public trusts as securities.

Interestingly, many crypto trusts traded on OTC Markets, a US exchange, expressly hold Unregistered Securities Designated by the SECincluding GROUND, MANAAnd SON. More and more crypto assets are rumor be unregistered securities designated by the SEC: ZEN, XLM and ZEN.

Nevertheless, certain trusts trading in U.S. OTC markets do not hold SEC-designated unregistered securitiessuch as POINT Or ETC trust. Perhaps if the SEC were to approve a spot ether ETF, commissioners could approve spot ETFs based on such potentially non-security crypto assets.

It should be noted that just because the SEC has not classified a crypto asset as an unregistered security, does not mean it is not. Congress did not direct the SEC to proactively classify all assets. Instead, the SEC simply chooses to accept or reject the requests it receives, or take enforcement action against illegal behavior on a case-by-case basis, because it has the time, money, personnel and resources.

The silence of the commissioners does not indicate a non-designation.

Of course, there is a counterargument to this logic. Unlike altcoins like DOT or ETC, only Bitcoin and Ethereum have futures contracts listed on the Chicago Mercantile Exchange (CME). This significantly sized CME market for ether alone could be an important reason to only approve a spot ether ETF and no other altcoins.

Spot Ether ETF: Is this no longer an obvious rejection from the SEC?

According to reports from sources at Bloomberg, Barron’s and the Wall Street Journal, the SEC’s Trading and Markets Division has requested changes to the joint Form 19b-4 from an exchange and a sponsor – likely VanEck. This is a bullish sign for possible spot ETF approval because, in the opinion of market observers, the SEC is generally silent or disinterested in 19b-4 filings if it intends to make them. dismiss.

Because the SEC is requesting a new application, the reasoning is as follows: his interest is probably a positive development.

A Bloomberg ETF analyst thinks ether is likely to get spot ETF approval from the SEC.

Many have viewed the SEC’s stance toward an ether spot ETF as decidedly negative. Joe Lubin’s ConsenSys even sued the SEC, claiming that the commissioners had secretly classified ether as an unregistered security.

Therefore, if the SEC is indeed considering possible approval of a spot ETF for Ethereum, it would be a marked change in tone.

Learn more: ConsenSys says SEC has designated ETH as a security but won’t say where

Amidst all these media reports, the price of ether increased by 29% in the last seven days — outperforming Bitcoin’s 12% rally by another 17%.

Form 19b-4 requests information from applicants necessary for the public to understand why the SEC should amend its Section 19(b)(1) rules pursuant to the Securities Exchange Act of 1934. In this case, the exchange and a sponsor of ETFs must explain why the SEC should allow the use of ether as the sole asset of a spot ETF.

Do you have any advice? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Blue skyAnd Google Newsor subscribe to our Youtube channel.

Fuente