Federal documents reveal recent discussions between Coinbase, a leading cryptocurrency exchange, and the Securities and Exchange Committee (SEC) over a potential cryptocurrency ETF. These conversations spotlight the ongoing intersection of regulatory bodies and the crypto sphere, an indication of increasing recognition for virtual assets despite concerns over potential market manipulation and lack of transparency.
The proposed ETF aims to give investors direct access to Ethereum, the world’s second largest cryptocurrency, enabling its trading concurrent with price fluctuations. Coinbase emphasized potential issues of market manipulation during their proposal, suggesting a surveillance-sharing agreement with the Chicago Mercantile Exchange to counteract fraudulent activities. They also highlighted the resilience of Ethereum to fraudulent activities due to its inherent features.
This development follows an application made by Crypto fund manager Grayscale, who sought SEC approval to convert its Grayscale Ethereum Trust into a spot Ethereum ETF. Positive movement in this area was seen earlier this year when the SEC approved 11 spot ETFs. These investment options are now accessible on stock exchanges and seeing significant capital inflows, marking a new wave of acceptance for such financial instruments.
The previously launched Bitcoin Trust by Grayscale also secured regulatory approval, effectively turning it into a spot Bitcoin ETF. Now, the firm is striving for the equivalent Ethereum approval, echoing Ethereum’s standing as the second largest digital currency. A recent report by British multinational bank Standard Chartered predicts that the SEC may approve Ethereum ETFs as early as May, potentially boosting Ethereum’s value considerably. As of now, Ethereum’s value stands slightly below its historical high at $3,948 per token.
