On May 23, 2024, the U.S. Securities and Exchange Commission (SEC) approved a major regulatory change allowing eight exchange-traded funds (ETFs) tied to ether, the second-largest cryptocurrency by market cap, to move forward. This follows the SEC’s approval of the first bitcoin ETFs earlier in the year.

The SEC’s approval involves rule changes for ETFs investing in ether for companies such as BlackRock, Fidelity, Invesco, and Ark Invest. A second round of approvals is required before these products can officially launch.

Since the anticipation of the SEC’s approval began, ether’s price has surged by more than 20% since Monday, contributing to a year-to-date increase of over 60%. This development marks a significant shift in the SEC’s stance after a prolonged period of silence on the matter. Initially, feedback was provided on Monday, causing a flurry of activities from issuers and exchanges, given their deadlines.

Gary Gensler, SEC Chair, noted concerns about compliance within the cryptocurrency sector highlighted by recent fraud cases including the conviction of FTX founder Sam Bankman-Fried.

If launched, these ETFs will make ether investment more accessible to U.S. investors, potentially driving further adoption and price increases of digital currencies.