SEC implicitly categorizing Ether as a commodity hints at likely approval of Ether Exchange Traded Funds (ETF) in 2024.
Recent developments hint at the upcoming approval of an Ether exchange-traded fund (ETF). This speculation stems from the U.S. Securities and Exchange Commission’s (SEC) actions, which suggest a tacit acknowledgment of Ether as a commodity. The SEC’s green light for Ethereum futures ETFs last year has been a critical factor in this inference.
James Seyffart, a Bloomberg ETF analyst, shared insights during a CryptoQuant webinar, pointing out the significance of the SEC’s decision to approve Ether futures ETFs. In October 2023, the SEC allowed the trading of these futures without challenging Ether’s classification, a decision overseen by the Commodity Futures Trading Commission (CFTC). This move by the SEC is pivotal, as it indirectly classifies Ether futures as commodity futures, an important distinction from securities.
The first batch of Ether futures ETFs in the U.S. hit the market on October 2, with notable investment firms like ProShares, VanEck, and Bitwise launching funds on the Chicago Board Options Exchange. Seyffart believes that if the SEC were to later classify Ether as a security, it would lead to legal challenges and potential delisting of these futures ETFs. The distinction between securities and commodities is crucial, as each has different legal, tax, and regulatory implications.
Anticipating Ether ETF Approval in 2024
Seyffart further argues that an Ether spot ETF is likely on the cards for this year. This prediction comes due to the SEC’s recent court case involving the Spikes Index, where it exempted a stock volatility index from being classified as security futures.
The SEC is on the clock with a final decision deadline in May 2024 for Ether spot ETF proposals from firms like VanEck, ARK 21Shares, and Hashdex. However, the regulator’s decision on spot Bitcoin ETFs may come sooner, potentially by January 10. Seyffart anticipates a positive outcome, predicting an influx of $10 billion into Bitcoin ETFs within a year.