SEC clears the way

Trading in Ethereum ETF launched in the USA

Since the beginning of the year, the price of ether has risen at a similar rate to bitcoin - from 2353 dollars on January 1 to currently 3514 dollars.

(Bild: ©ilolab - stock.adobe.com)

Now that the US Securities and Exchange Commission (SEC) has cleared the way for exchange-traded funds (ETFs) in the cryptocurrency Ether, trading in Ethereum ETFs will begin without further delay. Five ETFs will be traded on the Chicago Board Options Exchange (CBOE) in future, the options exchange announced. 

Ether is the second most important digital money after Bitcoin. Transactions take place on the Ethereum blockchain. Bitcoin was created as an alternative to conventional money and primarily serves as a digital store of value. Ethereum, on the other hand, is not just a cryptocurrency, but also an open source platform for creating and implementing digital contracts ("smart contracts") and decentralized applications.

In legal terms, Bitcoin is a commodity like gold. However, the SEC considered ether to be more of a security because when validating transactions ("stalking") on the Ethereum blockchain, market participants deposit a certain amount of ether as collateral and receive a kind of dividend in return. In order to avoid regulatory problems, the fund companies have now undertaken not to use their ether holdings for stalking.

Although experts expect Ethereum ETFs to boost prices in the medium and long term, the price of ether initially fell slightly following approval by the SEC, only to rise by around 2.5 percent in the morning. Since the beginning of the year, the Ether price has risen at a similar rate to Bitcoin - from 2353 dollars on January 1 to currently 3514 dollars (up 49.4 percent).

Trading not permitted in Europe
The SEC has approved a total of eight ETFs (Grayscale, Bitwise, Blackrock, VanEck, ARK 21Shares, Invesco Galaxy, Fidelity and Franklin Templeton). However, for regulatory reasons, shares in these funds can only be purchased by investors from the USA. Trading is not permitted in Europe, as index funds with only one value are not permitted here.

In the USA, listed funds offer an opportunity to participate in the price performance of Ether without having to invest directly in the cryptocurrency. This is particularly interesting for institutional investors who are not allowed to make direct crypto investments.