The approval of a Bitcoin spot exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) in January 2024 triggered a sharp rise in Bitcoin prices. Additionally, attention on the Ethereum spot ETF has also increased. If approved, it is predicted to similarly boost the cryptocurrency market. However, is there an opportunity to make money the night before the approval decision for the Ethereum spot ETF, scheduled for May 23, 2024?
As is known, an Ethereum spot ETF has not yet been approved for trading in the U.S., but Ethereum futures ETFs have been available for some time. Therefore, it is important to understand the difference.
In the spot market, assets such as commodities, currencies, and securities are exchanged and received immediately. The same applies to the much-anticipated Ethereum spot ETF, as it offers a more straightforward and transparent approach compared to futures ETFs, which purchase derivatives without directly owning the asset.
With direct cryptocurrency purchases, ETFs track the benchmark cryptocurrency price more accurately. Because the purchase process is simpler, such investments offer greater profitability and lower management fees. This is the reason for the high public interest around the approval of the Ethereum spot ETF, scheduled for May 23, 2024. So, what’s the deal with this approval?
The U.S. Securities and Exchange Commission (SEC) remains concerned about cryptocurrencies, which are often involved in fraud, can cause speculative bubbles, and make investors start to believe that this type of currency will be safer once approved. The Bitcoin spot ETF was only approved after the U.S. Court of Appeals ruled against the SEC in August 2023, forcing it to take action.
"Essentially, we believe that the view of the U.S. SEC is still conservative," said Financial Market Analyst at Broker Octa, Kar Yong Ang, quoted on Tuesday (May 21, 2024).