Ethereum Spot ETF Approved in the United States - What Does This Mean?

The first Ethereum spot ETF applications were approved in the United States. Ethereum thus became the second cryptocurrency to have a spot ETF approved in the US.

              
The first Ethereum spot ETF applications were approved in the US. An ETF refers to an exchange-traded fund, while a spot ETF refers to an ETF whose shares are backed by an underlying asset, in these cases ethers. The U.S. Securities and Exchange Commission approved a total of 8 applications for Ethereum spot ETFs. Probably the most prominent player behind the approved applications is the world's largest asset manager BlackRock. The first such Bitcoin spot ETFs were approved in the US in early January this year.
In general, Ethereum ETFs make Ethereum more accessible to the masses and institutional players. In particular, the inclusion of institutional players is facilitated by the ETF issuer and its partners buying and holding ethers on behalf of institutions. Bitcoin spot ETFs broke several records in the first few months. Therefore, the expectations of many cryptocurrency experts are also high for Ethereum spot ETFs. It will be interesting to see how much Ethereum ETFs will gain in popularity compared to Bitcoin ETFs. Ethereum's market capitalization is currently around 1/3 of Bitcoin's market capitalization, so the popularity of ETFs cannot realistically be expected to rise to the same level as Bitcoin ETFs. On the other hand, this also means that a possible high demand for Ethereum ETFs would probably have a stronger impact on Ethereum's price development.
According to many cryptocurrency experts, approved Ethereum spot ETFs will open the door to the approval of similar ETFs for other cryptocurrencies, such as Solana. Therefore, it is possible that we will see more approved cryptocurrency spot ETF applications in the US during 2024.

Ville Viitaharju
Cryptocurrency specialist