Ether cryptocurrency ETFs are approved by the SEC

The Securities and Exchange Commission has given its blessing to a fund that tracks the price of the most valuable cryptocurrency after Bitcoin.

< p class=" css-at9mc1 evys1bk0">Federal regulators on Thursday approved an investment product tied to the cryptocurrency Ether, the most valuable digital asset after Bitcoin, in a major boost for the crypto industry.

The Securities and Exchange Commission said a group of exchanges may begin listing investment products known as exchange-traded funds stock market, or ETF, linked to the price of Ether. The products would give people an easier and simpler way to invest in crypto, potentially raising prices and driving wider adoption of digital currencies.

In January , the S.E.C. approved similar products that track the price of Bitcoin, leading to a wave of new investments that helped propel the price of Bitcoin to an all-time high.

The impact of Ether approval may take longer to hit the market. Before exchanges can begin offering Ether ETFs, the S.E.C. must also approve a separate set of applications from companies that want to issue them, including large financial firms like BlackRock and Franklin Templeton. This process could take weeks or months, according to financial experts.

An S.E.C. spokeswoman said the agency had no comment beyond of a formal order approving the products.

The news sparked celebrations across the crypto industry. A representative for 21Shares, one of the companies seeking to offer the Ether investment product, called it “an exciting moment for the industry as a whole.”

But industry critics called the approval a dangerous move that would encourage broader investment in a volatile market.

“The S.E.C. has not fulfilled its mission to protect investors and markets,” Benjamin Schiffrin of Better Markets, a nonprofit that fights for stronger financial regulation, said in a statement.

Offered by large financial services companies, ETFs are essentially baskets of assets: rather than buying the assets directly, clients buy shares in these baskets. The products are easy to trade, from brokerage accounts with companies like Vanguard or Charles Schwab, and are popular with wealth advisors and other financial managers.

In the crypto world, ETFs. offer another key advantage: simplicity. Rather than navigating the complexities of an online crypto wallet, a customer could go online and purchase shares in a Bitcoin or Ether ETF. alongside stocks traded on Wall Street.

For years, crypto advocates have viewed these products as a promising way to encourage broader use of currencies digital. Before Bitcoin ETFs were approved, crypto companies fought against the SEC. in court, securing a legal victory in August that forced the agency to authorize the products.

Bitcoin ETFs have proven extremely popular, attracting billions of dollars investment. .

Ether price has rebounded over the past few months, following a crypto downturn that began in 2022. Ether is currently trading at around $3,800 per piece, an increase of more than 20%. from its high of just under $4,900.

That's a small fraction of the price of Bitcoin, which trades at around $68,000 per month. piece.