Ethereum exchange-traded funds (ETFs) are set to begin trading in November, as predicted by JPMorgan analyst Kenneth B. Worthington. This comes after the U.S. Securities and Exchange Commission (SEC) approved the filings of eight Ethereum ETF applicants, including major players like Grayscale Investments, Bitwise Asset Management, and BlackRock. However, these ETFs still need SEC approval for their S-1 registrations before trading can begin.
A key issue in the approval process is staking, as it remains unclear whether an issuer staking ETH on behalf of an ETF shareholder qualifies as an investment contract and therefore a security under the Howey test. The Howey test, established by a 1946 U.S. Supreme Court decision, helps determine if transactions are subject to securities laws. It states that a security exists when money is invested in a common enterprise with an expectation of profits derived from the efforts of others.
To increase their chances of approval, current ETF applications have been modified to exclude references to staking rewards, stating that these rewards will not be passed on to investors. This change is believed to have influenced the recent regulatory approval.
Worthington also highlights the political aspect of cryptocurrency trading, noting that it will become increasingly important leading up to the 2024 U.S. presidential election. Justin Sun, founder of Tron’s blockchain, has urged the crypto community to support a pro-crypto candidate in the upcoming election. Sun emphasizes the significance of backing a candidate who endorses cryptocurrencies, stating that the cryptocurrency community, companies, and protocols are important stakeholders whose voices should be heard and interests protected.
Interestingly, former President Donald Trump, who was once critical of cryptocurrencies, has now changed his stance and supports the crypto sector. He has even incorporated it into his re-election campaign.
Overall, the approval and trading of Ethereum ETFs is expected to have a significant impact on the cryptocurrency market, and the political landscape surrounding cryptocurrencies is likely to play a crucial role in the future.