Ethereum
Crypto Lifted by Ether’s Biggest Jump Since 2022 on ETF Outlook
(Bloomberg) — Cryptocurrency prices jumped on signs of momentum toward U.S. approval of exchange-traded funds investing directly in the second-largest token Ether, a change from the more pessimistic outlook for last week.
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The market-moving ETF speculation is something of a redux of the investor enthusiasm that greeted comparable U.S. Bitcoin funds, whose January listing sparked a rally in the largest digital asset to a level record.
Ether rose nearly 14% on Monday – the strongest advance since November 2022 – before adding to the gains to change hands at $3,675 as of 7:31 a.m. in London on Tuesday. At one point, Bitcoin climbed as high as $72,000, on its way to its all-time high of nearly $74,000 in mid-March.
The U.S. Securities & Exchange Commission has contacted at least one exchange and at least one potential issuer of spot-Ether ETFs to update related 19b-4 filings, according to people familiar with the matter, who asked not to not be identified because the matter is private. That’s a sign that the chances of getting SEC approval could increase, one of the sources said. The dialogue is an unexpected change but a green light is by no means guaranteed, the person added.
ETF Documents
19b-4 filings are just some of the required documents. Issuers also need the regulator to approve S-1 registration statements before launching products. A decision on at least one spot-Ether ETF application is expected by May 23.
An SEC spokesperson said the agency does not comment on individual filings.
Social media is rife with speculation that “the SEC may be more likely to lean toward potential approval, and traders are now scrambling to take positions as many have completely ruled out even the remote possibility of approval,” Chris said Newhouse, an analyst. at Cumberland Laboratories.
Ether is the native token of the Ethereum blockchain, the most important commercial highway in crypto. The network is popular for decentralized financial services, where investors trade, borrow and lend through automated software protocols rather than traditional intermediaries.
Growing chances
On Monday, Bloomberg Intelligence ETF analyst Eric Balchunas said he and colleague James Seyffart had increased the estimated probability of a spot-Ether ETF being approved from 25% to 75%.
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Some fund companies expected rejection because their private discussions with the SEC had not been as robust compared to the period before spot-Bitcoin ETFs launched, Bloomberg News reported Friday, citing two people familiar with the file, who asked not to be named discussing private conversations.
Caution was still required among some investors. Ravi Doshi, head of markets at FalconX, said the firm’s “derivatives desk has seen the majority of our counterparties tone down the move, in hopes that the SEC will move more slowly than markets anticipate.”
A skeptical SEC, which is otherwise cracking down on crypto, reluctantly accepted U.S. spot-Bitcoin ETFs earlier this year following a 2023 court reversal. Products like BlackRock Inc. and Fidelity Investments have has amassed $58.8 billion in assets, one of the most successful debuts ever for a fund category.
BlackRock and Fidelity are also looking to launch Ether funds. The digital assets industry views ETFs as a way to expand crypto’s investor base. Retail investors, hedge funds, pension funds and banks have poured capital into Bitcoin funds – Millennium Management, Steven Cohen’s Point72 Asset Management and Elliott Investment Management are among the buyers.
–With help from Ryan Weeks.
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