SEC approves rule change to allow creation of ether ETFs

The SEC has approved a rule change Thursday that would pave the way for ETFs that buy and hold ether, one of the world's largest cryptocurrencies.

The decision comes less than six months after the Securities and Exchange Commission approved bitcoin ETFs. Those funds have proven to be a big success for the industry, with net inflows already surpassing $12 billion, according to FactSet.

Late May had long been pegged as a potential decision date for the ether funds since it coincided with a deadline for the SEC to decide whether the VanEck Ethereum ETF could proceed.

Many of the companies that sponsor bitcoin ETFs — including BlackRock, Bitwise and Galaxy Digital — have also started the process of the launching an ether fund.

The price of ether rose just 2%, although it follows a 20% surge from earlier in the week in anticipation of Thursday's decision. Some investors may also be on pause, as the SEC's rule change approval does not guarantee that all the funds will launch.

Specifically, the SEC's order approves applications from various exchanges to list eight different ether funds. The order technically does not approve the funds themselves or set a date for the ETFs to begin trading.

Ether ETFs are expected to be smaller, at least initially, than their bitcoin counterparts. The Grayscale Ethereum Trust currently has about $11 billion in assets, much smaller than what the firm's bitcoin fund was before its conversion.

The approval of the ether ETFs is a sign that the SEC's stance toward crypto may be softening after a series of legal fights. The agency lost a lawsuit against Grayscale in 2023 that spurred the approval for the bitcoin products.

The SEC's push to regulate crypto has also come under scrutiny by politicians. The