In an earlier segment, SEC chair Gary Gensler was also unclear regarding the status of Ethereum as a security after Bitcoin ETF ratifications.
In the sudden outcome of the historic sanctioning and listing of 10 spot Bitcoin exchange-traded funds (ETFs), exhilaration has spread to the Ethereum community that a spot Ethereum exchange-traded fund might be forthcoming.
SEC Chair Reluctant on Approving Ethereum ETFs
However, for persons worried about a lot of merrymaking within one week, they should not. Gary Gensler, chair of the Securities and Exchange Commission, is always available to spoil the fun.
In an interview, Gary offered little reassurance when questioned whether a spot Ethereum exchange-traded fund will get SEC’s ratification soon. He said he considered what they did as cabin to Bitcoin, a non-security commodity.
Previously, they have approved gold spot and silver spot exchange-traded products. The cabin is only to the single non-security commodity token.
Gary did not reveal more information concerning an Ethereum exchange-traded fund in particular. However, his choice of words told something by stressing his perspective regarding Bitcoin as a commodity, he was possibly trying to create an implicit line between Bitcoin’s unopposed status as a commodity and other cryptocurrencies’ possible status as securities.
SEC Warn on Risk Associated with Digital Assets
For a long time, Gary has consistently claimed that Bitcoin is the only cryptocurrency he considers a commodity. The Securities and Exchange Commission has not made official pronouncements regarding the security status of Ethereum.
However, it had earlier indicated via legal filings that it considers all Ethereum transactions as falling under its control.
If the Securities and Exchange Commission were to consider Ethereum a security, there would be a higher possibility of the regulator becoming more unreceptive to a spot Ethereum exchange-traded fund than a Bitcoin exchange-traded fund.
It had rejected Bitcoin ETF for a long time before a federal appeals court was compelling it to do so. However, the same court verdict might push the regulator to sanction a spot Bitcoin ETF.
In his statement concerning the approval of the Bitcoin ETF, Gary noted that legal modifications have altered the ‘conditions’ linked to crypto exchange-traded funds.
Benefits of Spot Bitcoin ETFs
In October, judges instructed the Securities and Exchange Commission to evaluate Grayscale’s Bitcoin ETF. This is because of their inability to reject a spot Bitcoin exchange-traded fund erratically after ratifying a Bitcoin futures exchange-traded fund application.
Still, the regulator sanctioned an Ethereum futures ETF in October, possibly developing an equivalent legal setting.Futures exchange-traded funds monitor derivatives contracts’ prices. These contracts enable the purchaser to purchase or sell Bitcoin afterward.
No Bitcoin is bought and sold when futures exchange-traded funds are purchased and sold. Spot Bitcoin exchange-traded funds are not the same. In this case, their issuers purchase and keep Bitcoin on customers’ behalf.
Ethereum is up following enthusiasm evoked by the sanctioning of spot Bitcoin exchange-traded funds. There is confidence that a spot Bitcoin exchange-traded fund might follow.
For the first time since April 2022, the token neared $2700. This happened after Larry Fink, BlackRock’s chief executive officer, said that he supports an Ethereum exchange-traded fund.
Editorial credit: JRdes / Shutterstock.com
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