Bernstein analysts believe that the approval of spot Ether (ETH) exchange-traded funds (ETFs) by the United States securities regulator was not influenced by last-minute political pressure. Despite theories suggesting that the Securities and Exchange Commission’s shift in attitude towards spot Ether (ETH) ETFs was due to Democratic pressure to attract swing voters ahead of the upcoming U.S. election, this narrative lost credibility after President Joe Biden vetoed the SEC’s Staff Accounting Bulletin (SAB) No. 121 repeal bill.
According to analysts Gautam Chhugani and Mahika Sapra from Bernstein, the SEC felt pressured to approve ETH ETFs due to similarities with Bitcoin (BTC) ETFs, such as regulatory frameworks and the existence of live Ether futures products on the Chicago Mercantile Exchange, indicating Ether’s commodity status. Despite this, the analysts viewed the approval as a positive outcome for the industry.
Several spot Ether ETF applicants were reportedly surprised by the last-minute approval, as confirmed by Bernstein. The firm anticipates that the flow of funds into spot Ether ETFs will be lower than that of Bitcoin, but there is expected to be pent-up demand from similar market participants. Positive price action for Ether is expected leading up to the launch of the ETFs.
The SEC officially approved applications from various firms, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise to issue spot Ether ETFs on May 23. These approved issuers are currently awaiting the SEC’s approval of their S-1 registration statements, a process that could take weeks to months.
Overall, the approval of Ether ETFs marks a significant development in the industry, with potential for positive market impact and increased investor interest.