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This week, Coinbase, the largest cryptocurrency exchange in the United States, stated that it is only a matter of time before the US Securities and Exchange Commission (SEC) approves a spot Ethereum ETF.

Despite the SEC’s apparent lack of response to issuers, Coinbase remains hopeful that this product will soon be available on the market.

Several renowned asset managers, such as VanEck, BlackRock and Franklin Templeton, have already filed documents with the SEC to launch an Ethereum ETF. This product would allow investors to have exposure to ETH, the second largest cryptocurrency by market capitalization, through exchange-traded shares.

However, Wall Street’s top regulator has been slow to respond to the applicants. Additionally, it has been postponing deadlines and echoing its previous approach to Bitcoin spot ETFs before finally approving them in January of this year.

Ethereum ETF coming, says Coinbase

While such slowness is common in the ETF application process, the SEC’s reluctance to discuss these investment vehicles has led analysts at firms like Bloomberg and CoinShares to predict that these crypto funds will not receive approval by the May deadline.

This uncertainty has caused speculation in the market. However, Coinbase believes that the growing importance of cryptocurrencies as an election issue could influence the SEC to avoid a denial, saving political capital.

“As cryptocurrencies begin to become an election issue, it is also less certain, in our view, that the SEC would be willing to invest the political capital necessary to sustain a denial,” said David Han, institutional research analyst at Coinbase .

He added that even if the first deadline on May 23, 2024 finds a rejection, there is a high probability that litigation could reverse that decision.

reluctant SEC

Last year, crypto fund manager Grayscale won an appeal against the SEC to convert its Bitcoin fund into a spot ETF in a high-profile case. The SEC then reluctantly approved 11 Bitcoin ETFs on January 10. These investment products have been enormously successful, attracting billions of dollars in inflows.

The approval of an Ethereum spot ETF would mean a significant step forward for the cryptocurrency market, facilitating investors’ access to this digital asset through traditional markets. Such a move could further boost the acceptance and integration of cryptocurrencies into the global financial system.

The expectation of Coinbase and other market experts is that the SEC will eventually give in to market pressure and approve these ETFs, opening up new investment possibilities and solidifying Ethereum’s position as one of the world’s leading digital assets. Meanwhile, investors and asset managers are anxiously awaiting a decision that could change the landscape of cryptocurrency investment.

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