Thursday, 21 September 2023

Crypto News

ETF season continues as spot Ether application lodged while markets plod along

ETF season continues as spot Ether application lodged while markets plod along

Key Takeaways

  • The crypto market has seen increased volatility off the back of ETF developments in the last couple of weeks
  • Grayscale secured a positive ruling in its case against the SEC regarding its ETF application
  • Markets subsequently fell as the regulator pushed out the approval date of all ETF applications
  • Cathie Wood’s ARK Invest has now filed for a spot Ether ETF
  • Market is largely anticipating the approval of a futures-based Ether ETF before mid-October
  • ETFs are inevitable, and while the headlines may be repetitive, there is little volatility coming from anywhere else these days

The crypto markets are still enduring uncharacteristically low volatility, but there has been at least a little pickup in recent weeks. 

Most of it is due to ETFs, whether one way or another. Last week saw Grayscale secure a landmark decision against the SEC, with a federal court ruling that the SEC was wrong to reject an application from Grayscale Investments to convert its trust into an ETF. The judge said the regulator failed to “offer any explanation” following its decision. 

This sparked a fresh wave of optimism that not only would Grayscale secure ETF approval, but the slew of other applications currently on the waitlist would also be successful. 

However, markets gave back most of those gains when the SEC announced shortly thereafter that it was pushing out the decision on all ETFs until October. 

This delay aside, however, the regulatory picture is brightening significantly for crypto. Only a few months ago, the future of the entire industry seemed to be under threat in the US. While there remains serious concern over large swathes of the space (the myriad allegations against Binance alone could prove seismic), it is beginning to feel inevitable that ETFs are simply a matter of time. 

Not only that, but hope is now swelling that Bitcoin may not be the only asset to achieve the ultimate stamp of approval. Cathie Wood’s Ark Invest and 21Shares have filed for a spot Ethereum ETF, the first attempt to list such a fund in the US. 

While this represents the first spot ETF attempt, there have been several applications on the futures side for Ether. Bloomberg reported in August that the regulator would likely approve these products, which number nearly a dozen – an expectation that most around the industry are in line with. 

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