SEC Blesses Ether ETFs | Trump Accepting Crypto Contributions

The asset manager’s new short-term credit fund is hosted on the Ethereum blockchain.

START INVESTING • Newsletters • MyForbes

Mitchell Martin Senior Editor, Forbes Money & Markets
Follow me on X and Forbes

Steven Ehrlich Director, Forbes Digital Assets
Follow me on X and Forbes

THERE’S ETHER IN THE AIR

The Securities and Exchange Commission unexpectedly gave three U.S. financial markets the right to list exchange-traded funds based on the spot price of ether, paving the way for the No. 2 cryptocurrency to reach investors who do not want to deal with the hassles of crypto wallets, seed phrases and hackers. The decision clears the way for sponsors, including BlackRock and Fidelity, to offer the ETFs but each of the eight funds authorized still has to pass muster with the SEC; it is unclear how long that will take.

Once these funds begin trading, they will join 11 ETFs based on bitcoin that were approved in January and currently hold about $58 billion of assets. Together, the two sets of funds will give stock-market access to tokens that account for about two-thirds of the $2.68 trillion cryptocurrency market but only a minuscule fraction of the more than 14,000 digital coins that exist.

Ether was little changed after the announcement, trading late Friday at $3,709, but it is up almost 20% for the week, apparently reflecting speculation that the SEC would eventually allow the funds.

“The SEC's approval of Ethereum spot ETFs is a huge win for investors everywhere,” Greg Mortiz, chief operating officer of crypto hedge fund Alt Tab Capital, said in an emailed comment to Forbes. “There is massive demand for digital assets and for too long access to them has been restricted to either the technically savvy or the already wealthy. We see the largest financial institutions in the world creating products to meet that demand, and now we see a regulatory decision that embraces progress.

“Perhaps the more interesting question the ETF approval poses, is that if it is possible for ETH, what other altcoins is it possible for?”

HOUSE CRYPTO BILL WOULD END REGULATORS' TURF WAR

A chamber of Congress for the first time approved a law to set specific rules for the cryptocurrency business, which has been mired in legal and regulatory issues based on legislation from the previous millennium. The House of Representatives’ “Financial Innovation and Technology for the 21st Century Act” passed 279-136 with 71 Democrats joining 208 Republicans who voted in favor of it. Democrats in general have been wary of crypto, but the large contingent that joined in the vote might be a sign that their opposition is beginning to waver. (It might also be a sign that they expect the bill to die in the Democrat-controlled Senate or be vetoed by President Joe Biden and backed it for strategic reasons).

A key element of the bill would end a turf war between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Most crypto would be classified as commodities and end up under the CFTC, while the SEC would get those tokens that are ruled securities. The SEC has held the position that almost all cryptos are securities under current law. SEC Chair Gary Gensler opposed the House legislation, arguing it would allow crypto issuers to “self-certify” that they are issuing crypto as a commodity rather than a security, giving the SEC a limited 60-day window to review the classification.

The House separately voted to forbid the creation of a central bank digital dollar. Only three Democrats supported the Republican majority.

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$68,777

2.8%

Ether (ETH)

$3,709

19.8%

Tether (USDT)

$1

0.1%

Binance Coin (BNB)

$600

3.2%

Solana (SOL)

$168

0.2%

Sources: Forbes Digital Assets, CoinGecko. Prices as of 2:00 p.m. on May 24, 2024.

TRUMP TAKES CRYPTO

Underscoring the Republican embrace for digital currencies, former president Donald Trump said he would accept crypto contributions to his campaign as he seeks to retake the office from Biden. Trump, who had been cool to digital money for much of his first term in office, now boasts that he is the first “major party Presidential nominee” to accept it.

Forbes estimates that $3 million of Trump’s $7.5 billion of wealth is held in cryptocurrency.

ELSEWHERE

Standard Chartered Analyst Says Other Crypto ETFs Such As SOL, XRP ‘Is Likely A 2025 Story'

The Block