The United States Securities and Exchange Commission (SEC) is inviting public comments on a proposed rule change that could pave the way for asset management firm Fidelity to offer shares of its spot Ether (ETH) exchange-traded fund (ETF). The SEC issued a notice on November 30, encouraging “interested persons” to provide their input on the Fidelity offering, which envisions the Cboe BZX Exchange listing and trading shares of the Fidelity Ethereum Fund.
Fidelity had initially submitted the fund for approval on November 17, joining a long list of companies vying for a spot cryptocurrency ETF in the United States. The filing by Fidelity emphasized that investors in several other countries, such as Germany, Switzerland, and France, have already had opportunities to gain exposure to Ether through exchanges offering exchange-traded products. However, the U.S. market has been lacking a regulated and exchange-traded vehicle dedicated to Ethereum.
Members of the public will have a period of 21 days to submit their comments after the filing is published in the Federal Register. The filing highlights the challenges faced by U.S. investors seeking exposure to Ether, stating that they are left with limited and riskier options, considering the absence of an exchange-traded product (ETP) for spot ETH.
In fact, the absence of a spot ETH ETP puts U.S. investor assets at significant risk, as investors who would typically seek crypto asset exposure through this type of vehicle are forced to resort to alternatives that are generally more risky.
The filing asserts that the approval of a Spot ETH ETP would be a significant achievement for safeguarding U.S. investors in the crypto asset space. Despite numerous applications from multiple firms over the years, the SEC has not yet approved the listing of any spot cryptocurrency exchange-traded product or fund for U.S. markets. However, there have been recent developments, such as the listing and trading of ETFs tied to Bitcoin futures in October 2021, as well as the introduction of Ether futures ETFs in October 2023.
Several reports and industry experts have suggested that the SEC may be approaching a decision regarding the approval of a spot crypto ETF for listing on U.S. markets. Such a milestone would represent a significant step forward in mainstream crypto adoption. As of now, the SEC has not given the green light to any spot Bitcoin or Ether investment vehicle.
Fidelity’s proposal for a spot Ether ETF has garnered attention from the SEC, prompting the commission to seek public comments on the matter. The filing highlights the need for a regulated and exchange-traded vehicle dedicated to Ether, as U.S. investors currently have limited and riskier means of gaining exposure to this digital asset. The potential approval of a Spot ETH ETP would be beneficial for U.S. investors, providing them with a safer and more accessible option. The final decision from the SEC remains eagerly anticipated by the crypto community and could significantly impact the trajectory of mainstream adoption in the United States.
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