On May 23, 2024, the SEC approved exchange rule changes that will allow the listing and trading of a number of spot Ether exchange-traded products (ETPs). Ether is the second-largest cryptocurrency by market capitalization after Bitcoin. The decision follows the SEC’s recent approval of spot Bitcoin ETPs in January 2024, as previously summarized here.
The SEC separately allowed the first Bitcoin futures ETPs and Ether futures ETPs to begin trading on an exchange in October 2021 and October 2023, respectively.
Consistent with its previous order approving the listing and trading of spot Bitcoin ETPs, the SEC concluded with respect to the approved spot Ether ETP filings that fraud or manipulation that impacts prices in spot Ether markets would likely similarly impact Ether futures prices and that the relevant securities exchanges’ comprehensive surveillance-sharing agreement with the Chicago Mercantile Exchange (CME) Ether futures market could therefore be reasonably expected to assist in detecting and deterring fraudulent and manipulative acts and practices in the spot Ether markets. The SEC specifically cited in its approval order the high level of correlation between the Ether futures market and the spot Ether markets in recent years.
The spot Ether ETPs will be able to start trading after their registration statements are declared effective.
The SEC’s approval order is available here.