The U.S. regulatory authorities have approved the listing of Ethereum spot exchange-traded funds (ETFs). Just four months after the approval of Bitcoin spot ETF in January, the U.S. became the second country in the world after Hong Kong to allow trading of Ethereum spot ETFs. Initially, there were mixed opinions in the industry regarding the securities classification of Ethereum, leading to low expectations for approval. However, with this approval, the possibility of approval of Ethereum spot ETF trading applications from other asset management companies like BlackRock has increased.
On the 23rd, major spot Ethereum ETFs listed on the Hong Kong Stock Exchange showed an upward trend. On that day, HashKey Ethereum rose by 1.78% to close at 29.72 Hong Kong dollars. Harvest Ethereum increased by 1.63% to 9.34 Hong Kong dollars, and ChinaAMC Ethereum surged by 1.36% to close at 9.30 Hong Kong dollars.
These ETFs saw a bullish trend following the news that on May 20th (local time), the U.S. Securities and Exchange Commission (SEC) requested Ethereum spot ETF applicants to modify and resubmit their review requests. There was speculation in the industry that since the SEC made a similar request before approving Bitcoin spot ETF earlier this year, the approval of Ethereum spot ETFs was likely. Subsequently, on May 21st (local time), Bloomberg Intelligence (BI) raised the likelihood of SEC’s approval for Ethereum spot ETFs from 25% to 75%, leading to a nearly 20% surge in Ethereum.
With the increasing chances of approval, spot Ethereum ETFs on the Hong Kong Stock Exchange recorded a surge of around 19% on May 21st. They have continued to rise for three consecutive trading days (May 21-23). This is a different trend compared to the 3.7% decline in the Hong Kong Hang Seng Index and Hong Kong H Index during the same period.
In April, the Securities and Futures Commission (SFC) of Hong Kong approved Bitcoin and Ethereum spot ETFs. The approval of Bitcoin spot ETF made Hong Kong the second country after the U.S., while the approval of Ethereum spot ETF makes it the first in the world. The approval of Ethereum spot ETF in the U.S. following Hong Kong is expected to expand the versatility of virtual assets.
Experts predict that once trading of Ethereum spot ETFs begins, there will be a significant increase in funds from relevant institutions. Jeff Kendrick, a digital asset researcher at Standard Chartered, anticipates that “between $15 billion and $45 billion could flow in in the first 12 months.”