After the SEC gave the green light to the Ethereum spot ETF, Carlos Domingo, CEO of Securitize, supported by BlackRock, analyzed that the SEC has established Ethereum as a regulated commodity. This will have a significant impact on companies that build tokenized assets on Ethereum, and more financial companies will enter the asset tokenization field in the future.
The US Securities and Exchange Commission (SEC) has officially approved the 19b-4 documents (exchange rule changes) for eight Ethereum spot ETF applications, including BlackRock and Fidelity, taking an important step towards the listing of Ethereum spot ETFs.
Note: Formal trading listing still requires the approval of another necessary S-1 registration statement document from the SEC, the timing of which is undetermined.
The approval of the Ethereum spot ETF is significant for RWA Corporation
During the SEC’s green light, the governance token ONDO of the RWA Protocol Ondo Finance surged nearly 40% last week, reaching a new all-time high. Carlos Domingo, CEO of Securitize supported by BlackRock, analyzed that the approval of the Ethereum spot ETF clearly establishes Ethereum’s regulatory status as a commodity, which will have a huge impact on companies conducting asset tokenization on Ethereum.
In March of this year, BlackRock and Securitize jointly launched the first asset tokenization fund on Ethereum, the “BlackRock Institutional USD Digital Liquidity Fund” (BUIDL). ONDO Finance added $95 million worth of BUIDL tokens to its tokenized fund product OUSG on March 27.
Considering the approval of the Ethereum spot ETF, Carlos Domingo expects that with recent regulatory concerns eliminated, more conservative financial companies will enter the tokenization field. Compared to the Bitcoin spot ETF, the approval of the Ethereum spot ETF is more important for tokenization. This clearly indicates that ETH is not a security. From a regulatory perspective, this means that using Ethereum will be safe.
Other cryptocurrency ETF products are expected to emerge
Jaret Seiberg from TD Cowen Washington Research Group, an investment bank, released a report stating that since the Bitcoin spot ETF was approved earlier this year, the approval of the Ethereum spot ETF is inevitable, just about six months earlier than expected. Within the next year, there may be an ETF product containing a basket of cryptocurrencies, which may only cover Bitcoin and Ethereum, or include more currencies.
However, TD Cowen believes that this does not indicate a change in the SEC’s overall stance on cryptocurrencies. SEC Chairman Gary Gensler, who has a critical attitude towards cryptocurrencies, recently made a statement strongly opposing the cryptocurrency bill “Financial Innovation and Technology Act of the 21st Century” (FIT 21) that could weaken the SEC’s power.
Despite possible setbacks, TD Cowen predicts that the SEC will maintain a majority of Democrats until 2026 and will continue to sue cryptocurrency trading platforms that the SEC considers to provide unregistered securities token transactions.
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