SEC seeks input on spot ether ETFs, whose future is hardly certain

investmentnews.com:

Three spot-price ether ETFs being prepared by Fidelity, Bitwise, and Grayscale are in new round of public comments after the exchanges they would be listed on filed with the SEC.

The regulator would have to approve listing-rule changes that would allow the products, which would follow the go-ahead it gave earlier this year for nearly a dozen spot Bitcoin ETFs from various providers. The exchanges filed the requests Tuesday with the Securities and Exchange Commission.

Numerous companies are pursuing spot ether ETFs, with at least eight applications filed. Three firms – Fidelity, Ark 21Shares, and Franklin Templeton – have prospectuses that mention staking, a benefit of owning ether that will likely also result in extra scrutiny from the SEC. Staking involves holding onto crypto assets to support the network and earning more crypto for doing so.

With the first spot-bitcoin ETFs now on the market, attention has turned to a similar treatment for ether, and the SEC could potentially approve products as soon as next month. However, the regulator could easily deny applications and prolong the approval process.

Given the early success of the bitcoin products, which have attracted tens of billions in sales since their recent launch, asset managers appear to see a related opportunity with ether.

“Ethereum, the second most popular cryptocurrency globally, has surpassed bitcoin in performance over the past year. Despite its popularity, mainstream investors often face limited access to Ethereum,” Maurice Wilson, investment advisor representative at Wilson Wealth, said in an email. “An ETF could bridge this gap, offering millions of investors access to Ethereum without the need for digital wallets or unfamiliar platforms.