The timeline for when exchange-traded funds (ETFs) tied to the cryptocurrency ether can commence trading depends largely on how quickly issuers address queries from the U.S. Securities and Exchange Commission (SEC), Chair Gary Gensler stated on Wednesday. Last month, the SEC approved applications from Nasdaq, CBOE, and NYSE to list spot ether ETFs, a surprising win for the cryptocurrency industry, which had anticipated rejections following discouraging meetings with the regulator.
The SEC still needs to approve the ETF issuers’ registration statements, which detail investor disclosures, before trading can begin. This process typically involves extensive back and forth between ETF issuers and SEC officials. “These registrants are self-motivated to be responsive to the comments they get, but it’s really up to them how responsive they are,” Gensler remarked, declining to specify whether the process would take weeks or months. He explained that last year’s court challenge by Grayscale Investments, which forced the SEC to approve spot bitcoin ETFs in January, influenced their decision on ether products. Grayscale successfully argued that since the SEC had approved ETFs tied to bitcoin futures, it should also approve spot bitcoin ETFs, given the high correlation between bitcoin futures and spot prices. Gensler noted that the cases are similar, as ethereum futures have been trading since last year, with correlations similar to those in the bitcoin space.