The U.S. Securities and Exchange Commission (SEC) is reportedly preparing to allow the creation of Ethereum exchange-traded funds (ETFs), according to sources familiar with the matter. This development comes as a surprise to many, as the SEC has been known for its cautious approach towards cryptocurrencies. While the approval of Ethereum ETFs would be a significant win for the crypto industry, it coincided with a flash crash in the price of ETH.
Several companies, including Volatility Shares, Bitwise, Roundhill, VanEck, Valkyrie, and ProShares, have filed applications to launch Ethereum-based ETFs. The SEC has previously rejected spot-based crypto ETFs but has approved futures-based Bitcoin funds. The first Ethereum futures ETF, Valkyrie, is expected to be approved on October 3 or 4, followed by a pure Ethereum futures ETF by Volatility Shares on October 12.
ETF expert James Seyffart shared a list of current ETF applications pending approval, indicating that the approval of Ethereum futures ETFs is imminent. This move by the SEC is seen as a validation of the growing acceptance of cryptocurrencies in the mainstream financial industry.
While the news of Ethereum ETFs should have been a bullish signal for ETH, the cryptocurrency experienced a flash crash, dropping to its lowest levels since mid-June. In early Asian trading, ETH plummeted to $1,576 before recovering slightly on the SEC news. However, it is still down 6% on the day, trading at $1,688 at the time of writing.
The flash crash highlights the volatility and unpredictability of the cryptocurrency market. Despite the promise of an ETF, investors remain cautious, leading to a massive sell-off. Ethereum had been trading around $1,850 for the past two months before the recent decline. The future price trajectory of ETH will depend on whether it can find support at its current levels or if further downside is expected.
The approval of Ethereum ETFs by the SEC is a significant milestone for the crypto industry, signaling a shift in regulatory stance. However, the flash crash serves as a reminder of the inherent risks associated with investing in cryptocurrencies. As the market continues to evolve, it is crucial for investors to exercise caution and stay informed about the latest developments.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. Cryptocurrency investments are subject to market risks, and readers should do their own research before making any investment decisions.