A bipartisan group of U.S. House lawmakers, led by Majority Whip Tom Emmer and Democrat Josh Gottheimer from New Jersey, recently reached out to SEC Chair Gary Gensler. They are advocating for the approval of spot Ethereum ETFs. Their argument hinges on providing investors with a transparent, safe, and regulated way to access cryptocurrencies. They emphasize the need for a fair and consistent approach to the review of upcoming digital asset-backed ETPs applications.
JUST IN: 🇺🇸 US lawmakers urge SEC to approve spot Ethereum ETFs, Politico reports.
— Watcher.Guru (@WatcherGuru) May 23, 2024
Legislative Developments and Potential for a Solana ETF
The passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) might speed up the process for ETF approval. Despite Gensler’s objections to FIT21, there’s evident legislative support for regulated investment products in digital assets. The lawmakers highlighted their support for various cryptocurrencies, not just Ethereum, indicating that other digital assets like Solana (SOL) could also be considered for ETFs. Market analysts speculate that a Solana ETF could follow Ethereum’s, attracting significant interest.
A bipartisan group of House lawmakers (incl Majority Whip Tom Emmer and NJ Democrat Josh Gottheimer) have sent Gary Gensler a letter urging the SEC to approve spot Ether ETFs (and 'other' digital assets) bc it offers investors crypto access in regulated transparent safe format pic.twitter.com/YLSJh6n0lF
— Eric Balchunas (@EricBalchunas) May 23, 2024
Earlier efforts to establish a Bitcoin ETF have increased the focus and investment interest towards an Ethereum ETF.
Potential Market Impact of an Ethereum Spot ETF
The crypto community is abuzz with the potential approval of an Ethereum spot ETF. Analysts, including those from QCP Capital, suggest that approving the ETF could increase ETH’s price by as much as 60%. Major firms like BlackRock Inc., along with Fidelity, VanEck, Invesco/Galaxy, Ark Invest, and Franklin Templeton, have updated their ETF applications in anticipation of a positive decision.
If the Ethereum spot ETF faces rejection, it could trigger lawsuits similar to those filed after the rejection of Bitcoin spot ETFs. Such a decision could significantly influence market dynamics and investor sentiment.