According to analysts at Bernstein, the approval of spot Ether (ETH) exchange-traded funds (ETFs) by the United States securities regulator was not a result of last-minute political pressure. The speculation that the Securities and Exchange Commission (SEC) changed its stance on spot Ether ETFs due to pressure from Democrats aiming to secure swing voters ahead of the upcoming U.S. election lost credibility after President Joe Biden vetoed the repeal of the SEC’s Staff Accounting Bulletin (SAB) No. 121.
In a report dated June 3, Bernstein analysts Gautam Chhugani and Mahika Sapra highlighted that the SEC was aware of the similarities between spot Ether and Bitcoin ETFs, including market correlations and the existence of Ether futures products on the Chicago Mercantile Exchange, indicating Ether’s status as a commodity. Despite this, the analysts viewed the approval of the spot Ether ETF as a positive development for the industry.
Bernstein revealed that they had conversations with spot Ether ETF applicants who were taken aback by the SEC’s sudden decision to approve the ETFs. While the firm anticipates that the inflows into spot Ether ETFs will be lower compared to Bitcoin ETFs, they expect a surge in demand from similar market participants.
The analysts at Bernstein also predict a positive price movement for Ether leading up to the ETF launch. The SEC officially greenlit 19b-4 applications from major financial institutions like VanEck, BlackRock, Fidelity, and others to issue spot Ether ETFs on May 23. These approved ETF issuers are currently waiting for the SEC to approve their S-1 registration statements, a process that could take weeks to months.
In conclusion, the SEC’s approval of spot Ether ETFs marks a significant milestone for the industry, with potential positive implications for Ether’s price performance in the near future.