The recent approval of spot Ethereum exchange-traded funds (ETFs) by the SEC has led industry experts to believe that this confirms Ether’s status as a non-security. Analysts assert that the approval of these commodity-based trust shares signifies that the SEC acknowledges Ethereum as not being a security, potentially solidifying the classification of other tokens as commodities as well. If Ether ETFs receive final approval through S-1, it would settle the debate once and for all, affirming ETH as a non-security. This conclusion is supported by the fact that funds with more than 40% securities are considered investment companies and cannot register through a Form S-1, which the ETH ETFs did.
Some experts, such as Adam Cochran, suggest that the non-security status of ETH could be applied to tokens of other projects, indicating that many projects may have attributes of commodities without realizing it. While the approval of spot Ether ETFs reinforces the non-security classification of Ether, experts anticipate that the SEC may still focus on actors involved with staking Ether. There is speculation that the SEC may differentiate between Ether itself, which they perceive as a commodity, and staked Ether, which could potentially fall under the definition of a security. Despite the ETF approval, it is possible that the SEC could pursue individual actors and staking services moving forward.
The SEC officially approved 19b-4 applications from various ETF issuers, including VanEck, BlackRock, Fidelity, Grayscale, and others, for issuing spot Ether ETFs. Notably, several issuers removed staking from their final applications, and Hashdex was the only issuer that did not receive regulatory approval on that day. While these issuers have gained approval for their ETFs, they must await the SEC’s approval of their S-1 registration statements before launching. Bloomberg ETF analyst James Seyffart predicts that S-1 approvals could be granted in a few weeks, although the process may take longer, typically up to five months. However, Eric Balchunas, another Bloomberg analyst, believes that a mid-June launch is possible.
The SEC’s approval order did not explicitly confirm Ether’s non-security status, leading to some ambiguity in the matter. Finance lawyer Scott Johnsson noted that the issue was “completely sidestepped,” without any clear confirmation from the SEC. It is expected that an official statement from the SEC and its Commissioners will provide more clarity on the classification of Ether and other tokens in the future. The approval of spot Ethereum ETFs in the United States is anticipated to have a positive impact on the price of ETH, potentially leading to a significant rally of up to 60% in its price, according to some market analysts. The launch of these ETFs is expected to bring more institutional investment into the Ethereum ecosystem, supporting its growth and development.
