The SEC’s approval of spot ether ETFs will unlock new avenues of opportunity for advisors, the crypto industry, and investors, according to multiple voices from across the wealth and investment spectrum.
On Thursday, after much anticipation from the markets, the federal securities regulator unlocked the doors to ether ETFs by approving a proposal to let US stock exchanges list spot ether ETFs.
The SEC’s historic verdict drew praise from the Digital Assets Council of Financial Professionals, which claimed the decision as a win for the investment industry.
"The SEC's approval of spot Ethereum ETFs is proof that digital assets are a legitimate asset class worthy of consideration by all investors," said Ric Edelman, founder of DACFP and an icon in the wealth management industry.
Edelman drew parallels with the SEC’s decision to give spot Bitcoin ETFs its blessing in January, predicting a similar trend will follow for Ethereum.
"Just as we have seen massive asset flows into spot Bitcoin ETFs, which debuted only a few months ago, we will likewise see substantial flows into these new products," he said.
Hailing Bitcoin and Ethereum as “the Coke and Pepsi of crypto,” he predicted the acceptance those crypto spot ETFs in the US would open the floodgates for even more new strategies.
“Now that there are spot ETFs for both of them, you can expect an array of additional ETFs to enter the market, featuring combinations of the two, leverage, and active management,” he said. “The investment opportunities are going to grow exponentially, as will the prices of both of these assets."
Sergey Nazarov, co-founder of Chainlink, a blockchain network service provider said the Ether ETF approval has broader implications for the crypto space.
“[I]t proves that the capital markets are now getting involved in the crypto industry in earnest for some of their largest user bases and most widely used products,” Nazarov said in an emailed statement.
The SEC nod for Ether ETFs is also pivotal, he said, for “the spotlight it places on the potential of smart contracts and decentralized applications, which are critical use cases for Ethereum.”
With both ether and bitcoin spot ETFs now in play, crypto-curious advisors and investors should have a wider base for diversification because of the different ways they’re used.
But according to a leading executive from Purpose Investments, one of the pioneering providers of spot bitcoin and ether ETFs in Canada, there’s been a trend of high correlation within the cryptocurrency space.
“Right now, it does seem to be trading more on sentiment and what's risk-on than anything else,” Greg Taylor, Purpose Investments’ chief investment officer, said in an interview.
“Ethereum probably will trade similar to that, at least in the near term, until it can actually start to prove itself out,” Taylor said.
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