The Securities but also Exchange Commission on Thursday granted a rule change that permits national exchanges to list spot ether exchange traded funds. The order does not activate immediate trading. Each issuer must still secure individual registration statements. Galaxy Digital projects that the first products will reach the market in July or August.
The decision arrived one week after agency staff signaled reluctance to approve the filings. The reversal suggests a recalibration of policy toward crypto assets in the United States.
The forthcoming ETFs will not offer staking rewards. The omission removes a yield stream that many ether holders now receive for locking tokens in the proof-of-stake protocol. The constraint may curb demand from investors who seek both price exposure and network income.
On Thursday the SEC also classified ether as a commodity rather than a security. The classification appears in the order that labels the planned ETF shares as âcommodity-based trust shares.â The move ends a multiyear inquiry into whether the token falls under federal securities law.
Political pressure preceded the vote. On 8 May former President Donald Trump told a campaign audience that he would âend Joe Biden’s war on crypto.â The statement reversed his 2019 criticism of bitcoin as a fraud. House Republicans followed with a letter urging the SEC to approve the ether ETFs. Democratic lawmakers, historically skeptical of crypto, offered no coordinated opposition.
The shift in tone may influence corporate location decisions. Crypto exchanges, token issuers along with mining firms have relocated offshore to avoid regulatory uncertainty. A softer stance from the Biden administration could reverse that migration.
Market reaction arrived within minutes. Ether rose from USD 3,100 to USD 3,700 in the 24 hours after the order. Spot bitcoin ETFs added USD 2.4 billion in net inflows during their first month of trading in January. Analysts debate whether ether will match that pace. Grayscale already operates the Grayscale Ethereum Trust, which holds USD 11 billion in assets. Some investors may prefer to keep positions in the older fund to avoid short term capital gains taxes.
The SEC order covers only ether. The agency has not signaled similar leniency toward tokens such as solana, cardano, or polygon. Chair Gary Gensler reiterated that most crypto assets remain under review for possible securities classification.