Advertisement

Ether crypto prices drop after SEC moves closer to approving ETFs

Prices for Ether crypto dropped Friday following Securities and Exchange Commission trading approval for Ether ETPs, including ETFs. The SEC approved Bitcoin exchange-traded funds in January. File Photo by Dave Hunt/EPA-EFE
Prices for Ether crypto dropped Friday following Securities and Exchange Commission trading approval for Ether ETPs, including ETFs. The SEC approved Bitcoin exchange-traded funds in January. File Photo by Dave Hunt/EPA-EFE

May 24 (UPI) -- Ether cryptocurrency prices slid Friday after the Securities and Exchange Commission cleared the way for spot Ether exchange-traded products, or ETPs, including Ether exchange-traded funds, or ETFs.

The price of Ether declined 2% to approximately $3,700 Friday morning, according to Coin Metrics.

Advertisement

"Today's market behavior seems more like a pause as investors digest recent gains and assess the impact of external economic factors, including the recent rates sell-off. This pause likely also reflects a cautious approach given the ongoing uncertainty about the timeline for regulatory approvals, such as S-1 filings," Regarding Ether's price decline, SynFutures CEO Rachel Lin said.

The SEC found that spot Ether ETPs "are reasonably designed to promote fair disclosure of information that may be necessary to price the shares of the Trusts appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material non-public information relating to the Trusts' portfolios, and to ensure fair and orderly markets for the shares of the Trusts."

The SEC instructed the New York Stock Exchange, Nasdaq and Cboe to amend applications to list Ether ETFs.

"While the rationale for the SEC's sudden change of heart is not immediately clear, there is speculation around D.C. that it is part of a broader White House decision to soften its antagonistic stance toward crypto," senior Beacon Policy Advisors analyst Christopher Niebuhr wrote, in a Friday client note.

Advertisement

In the filing approving the Ether ETPs, the SEC noted that concerns about potential fraud and manipulation of crypto still exist and that there are also concerns about price volatility exposing retail investors to an unstable asset.

The SEC filing noted a concern that approving spot Ether ETPs "would threaten not just investors but also the broader financial system" by further entangling the crypto industry with traditional finance.

But the SEC concluded there were potential benefits as well as risk concerns.

"The Commission has considered these potential benefits and concerns in the broader context of whether the Proposals meet the applicable requirements, including the requirement that the Exchanges' rules be designed to "prevent fraudulent and manipulative acts and practices," the SEC filing said.

The SEC said it had concluded that the ether ETPs proposals meet those requirements.

In January the SEC approved Bitcoin's exchange-traded funds, allowing 11 investment companies to offer "spot bitcoin" ETFs.

The firms offering bitcoin ETFs are Bitwise, Grayscale, Hashed, BlackRock, Valkyrie, BZX, Invesco, VanEck, WisdomTree, Fidelity and Franklin.

Latest Headlines