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Ethereum, the nerdy cryptocurrency that was lately overshadowed by Bitcoin, is in the news again, and the price is pumping. What gives?

Well, only one of the most important developments in Ethereum's history, anon. An Ethereum spot ETF (Exchange Traded-Fund) might get approved in the U.S. today that's Thursday, May 23.

Before we get into all that, here's a very short primer on Ethereum or ETH. Launched in 2015 by programmer Vitalik Buterin and others, Ethereum is the second largest cryptocurrency by market cap, behind Bitcoin, and it has been so for the better part of the past five years or so.

Ethereum is a very different beast from Bitcoin. The latter is a digital currency and a public ledger of transactions that uses a network of computers (miners) to securely verify every transaction in the system, as well as create new coins through a computing-intensive process called proof-of-work.

Ethereum is a blockchain platform for decentralized apps. Unlike Bitcoin, it uses proof-of-stake to power and secure the network, meaning there is no environmentally unfriendly mining, with validators using a stake of their ether or ETH (the underlying currency of the platform) to validate transactions. Also, unlike Bitcoin, which is all about the secure sending and receiving of bitcoins and fairly little else, Ethereum is a platform for other decentralized apps (also called smart contracts) to run on.

As you can imagine, this makes Ethereum more powerful than Bitcoin in a sense, but it also makes it more complicated, both in terms of usage and implications. These days, basically everyone the likes of large banks and pensions funds included understands Bitcoin to be a largely decentralized digital asset, which can be bought, securely stored and sold, akin to a digital version of gold. Ethereum is a lot more complicated, with the U.S. SEC (Securities and Exchange Commission) not being entirely clear on whether ETH is a security or not.

This leads us to the part about ETFs. In January 2024, after receiving the SEC's blessing, Bitcoin spot ETF funds started trading in the United States. This had immense implications as to who can buy Bitcoin; suddenly, a U.S. state pension fund or an investment fund was able to easily get exposure to Bitcoin without worrying about breaking some rule. And the "spot" part, in contrast to a futures ETF, means that the Bitcoin spot ETFs must buy actual Bitcoins when someone buys their product.

The interest was record-breaking, with more than $13 billion flowing into BTC via spot ETFs since their inception. And unsurprisingly, the price of Bitcoin soared from around $42,000 in early January to roughly $69,500 at writing time.

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Many of the same entities large investment companies such as BlackRock, VanEck, and Ark also filed for a spot Ethereum ETF, with deadlines for SEC's approval or denial starting on May 23. And up until a few days ago, analysts largely believed that the ETFs would be denied, given SEC's previous reluctance to provide clear guidance over whether ETH is a security or not.

This has changed. According to Bloomberg senior analyst Eric Balchunas, there was "chatter" that the SEC has completely reversed its stance on Ethereum, followed by a slew of potential ETF issuers submitting amended 19b-4 forms to the SEC, signaling that there's a very good chance that the ETFs are on their way for approval.

We know, the sheer mention of something like a 19b-4 form made you fall asleep instantly. But we mention it because there's another set of forms that need to be approved, the S-1 forms, and those are key for actual ETF approval.

In practice, this means we could get a very good indication that one or more (probably more) Ethereum ETFs are coming, but it might take weeks or months before they actually start trading.

As a result of these filings, the price of Ethereum rose from around $3,100 to $3,800, where it's trading at writing time.

Of course, nothing is official or set in stone. The Ethereum ETF applications could still get denied, though the consensus among experts is that it's now a question of when, not if, it will happen. A denial would surely be a cold shower for Ethereum's price, at least in the short term.

This is not just about Ethereum's price. This sudden change of sentiment by the SEC could mean that the U.S. government is suddenly far more open to everything crypto related. Indeed, an important crypto bill was just passed by the U.S. House of Representatives, despite the SEC head Gary Gensler having some very stern words about it.

Perhaps the simplest of implications of this approval is other crypto spot ETFs getting the nod in the future. But with BlackRock launching a tokenized version of its money-market fund on Ethereum, it's getting easy to envision a future in which a big chunk of global finance exists on the blockchain. In other words, your nerdy, crypto-mining neighbor who told you that one day all of finance will roll into crypto, may have actually been right.

Well, unless you're a trader looking to capitalize on price moves, you don't really have to do anything. Regardless of whether the Ethereum spot ETF is denied, approved, or delayed today, Ethereum and its ecosystem of apps will keep trudging along.

But it is important to consider that a potential approval fully legitimizes an entire new class of crypto assets. Institutions, funds, banks, perhaps even pension funds, will be looking to get in on the action, and it could spark a thriving period for Ethereum, as well as the apps and assets that reside on it. After a bit of a lull in the past couple of years, the crypto space could once again become very exciting over the next couple of years.

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Ethereum heats up over key ETF decision. Here's what you need to know. - Mashable

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Ethereum (ETH) faced a nearly 5% crash in one hour this Thursday, despite the anticipation around the approval of spot Ethereum exchange-traded funds (ETFs) in the US. The X user identified as ai_9684xtpa pointed out that this was likely a market manipulation movement by the trading firm Symbolic Capital Partners.

The agency sold 6,968 ETH in one minute at 20:56, worth $27.38 million, with an average selling price of $3,930; one transaction sold 3,497 ETH on the chain at one time, and the bribe cost was as high as 90 ETH, explained ai_9684xtpa.

Such transactions are known as MEV, short for maximal extractable value, which consists of using on-chain resources to profit. The payment of 90 ETH suggests a hurry to sell the position at a higher price to make it crash, possibly to buy it again at a lower price.

Since the crash, Ethereum has ranged in and out of the $3,800 price level and is priced at $3,803.37 at the time of writing, nearly 22% away from its previous all-time high.

As shared by Bloomberg ETF analyst James Seyffart, an approval of spot Ethereum ETFs is happening this Thursday. Despite the low odds given to this scenario until last Monday, Seyffart and his fellow Bloomberg analyst Eric Balchunas boosted the chances to 75% after the SEC started contacting the issuers.

Since then, various asset management firms presented amends to their 19b-4 filings, and VanEcks Ethereum spot ETF even got listed on DTCC under the ticker $ETHV. The first final deadline is today, as the US regulator must decide on VanEcks application.

Moreover, according to Balchunas, the SECs decision on spot Ethereum ETFs might come at 4 pm (EST). Although a positive outcome is expected, it doesnt mean immediate permission for trading.

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Ethereum price crash attributed to MEV manipulation: Report - Crypto Briefing

The U.S. crypto industry has complained loudly about a lack of regulatory clarity, but one firm sees it differently. Digital assets platform Prometheum has taken the contrarian view that a clear legal path already exists to trade cryptoa stance that has drawn the ire of others in the industry.

On Friday, the New Yorkbased company put its theory to the test by launching its long-planned custody services for Ethereum. The move is notable because Prometheum is doing so in a way that classifies the token as a security under the supervision of the Securities and Exchange Commission. The custody launch appears to validate the position of agency chair Gary Gensler, who has countered the broader crypto industrys position by saying the existing regulatory regime is adequate and effective.

It eliminates a lot of the arguments that things cant be done under existing laws, said Aaron Kaplan, the co-CEO of Prometheum Inc., the parent company of the entity launching Ether custody. It marks the first time thatan investment contract digital asset security is being custodied and treated under the securities laws.

Founded by the brothers Aaron and Benjamin Kaplan, Prometheum existed in relative obscurity before bursting onto the crypto scene in mid-2023 with the announcement that it had procured a first-of-its-kind broker-dealer license that would allow firms to custody digital asset securities.

While much of the blockchain industry argues that the vast majority of cryptocurrencies should not be treated as securities under the jurisdiction of the SEC, Prometheum made a novel alternate claim. It argued that its special-purpose broker-dealer distinctionalong with a license for a separate entity to operate an alternative trading platformwould allow it to offer trading for cryptocurrencies under existing SEC regulations.

Prometheums wager, along with a contentious appearance by Aaron Kaplan at a House Financial Services Committee hearing on digital assets, drew withering critique from industry leaders, who argued that Prometheums approach would not work, and that it would not be able to launch products or find customers.

For months, Prometheum declined to name which crypto assets it would treat as securities and offer on its platforms, until February, when it announced that it would soon make Ethereum available for custody. While the launch does not constitute its full trading offering, custody is a necessary first step to facilitating trading, as customers need to have a venue to hold the assets they buy and sell. By operating both the custodian and the trading system under separate entities with approval from the SEC and the Financial Industry Regulatory Authority (FINRA), an independent industry oversight body, Prometheum claimed it had found a compliant path where competitors like Coinbase had failed.

Again, the announcement was met with vitriol, with crypto advocates fearful that the launch would mean the SEC viewed Ether as a securitya position the agency has not yet made, but has repeatedly telegraphed, and that would have far-reaching consequences for the sector. Those worries were exacerbated when the SEC issued a Wells notice against the Ethereum developer Consensys in late April that seemed to confirm the industrys fears.

Prometheums launch of Ether custody services, however, was delayed beyond its target of Marchuntil Friday. Kaplan told Fortune that Prometheum Inc., the subsidiary of Prometheum that holds the broker-dealer license, soft-launched the product with a small group of companies and planned to fully launch custody services by the first week of June. Full trading, he said, would come within a quarter. He declined to provide further details on the companies included in the pilot.

After months of threatening to upend the crypto industrys long-held belief about the possibility of trading Ether under SEC guidance, Prometheums custody launch represents the first test of the companys strategy.

It took a little longer than we anticipated, said Kaplan. But we didnt really have the option of doing it a different way.

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Controversial blockchain firm Prometheum launches long-awaited Ethereum custody - Fortune

US lawmakers are imploring the SEC to approve spot Ethereum ETFs.

In anticipation of an forthcoming decision on a spot Ethereum ETF, a bipartisan group of House lawmakers, including Majority Whip Tom Emmer and New Jersey Democrat Josh Gottheimer, have sent a letter to SEC Chair Gary Gensler urging the commission to approve spot Ethereum ETFs and other digital assets. This would provide investors with regulated, transparent, and safe access to cryptocurrency.

JUST IN: US lawmakers urge SEC to approve spot Ethereum ETFs, Politico reports.

We urge the commission to maintain a consistent and equitable approach when reviewing upcoming applications for other digital asset-backed ETPs, the letter read.

Recent legislative measures, such as the approval of the Financial Innovation and Technology for the 21st Century Act (FIT21), could expedite the ETF approval process. Despite Genslers public opposition to FIT21, the legislative push signals a growing support for regulated digital asset investment products.

The lawmakers letter also mentioned other digital assets alongside Etherehum, suggesting the possibility for other cryptocurrencies to apply for spot ETFs.

It is interesting to me that they say "other digital assets" vs only mentioning Ether. Will be interesting to see how far and how quickly the ETF industry pushes envelope (which is something its good at). Wouldn't be surprised if they pounce on SEC vulnerability and file all

Certain analysts believe that Solana (SOL) could be next in line for an ETF if Ethereums is approved. A spot Solana ETF would likely attract substantial demand, second only to Bitcoin (BTC) and Ethereum (ETH).

Earlier this year, a Bitcoin ETF increased attention and investment for a spot Ethereum ETF.

The impending spot Ethereum ETF decision has created a buzz around the crypto community. Some analysts project that an ETF approval would boost the price of ETH by 60%, per QCP capital.

Key players such as BlackRock Inc. and five other issuers Fidelity, VanEck, Invesco/Galaxy, Ark Invest, and Franklin Templeton have recently amended their ETF filings with the Securities and Exchange Commission (SEC) in anticipation of ETF approval.

If an Ethereum spot ETF is denied, it could lead to lawsuits, mirroring the reaction following the initial rejections of spot Bitcoin ETFs.

The SECs decision is expected to be announced around 4:00 p.m. EST on Thursday

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House lawmakers send letter to Gary Gensler urging SEC to approve spot Ethereum ETFs - crypto.news

(ETH) price shot higher over the last 48 hours, driven by favorable regulatory developments that boost the chances of an ether exchange-traded fund (ETF) being approved soon.

Nevertheless, the chances of a major "buy the rumor, sell the fact" reaction for ETH seem lower compared to , according to a recent Citi report.

Bitcoin dropped 17% after ETF approval due to the hype and leveraged bets. In contrast, the potential approval of an ETH ETF has been less expected, leading to less extreme pre-positioning, the report says.

Upon the release of these reports, ETH futures open interest (OI) and funding rates were subdued compared to previous months. However, OI has started to increase, indicating rising anticipation of a potential ETF approval.

Net flows into Bitcoin ETFs have been a major driver of returns since their launch in January, explaining much of the cryptocurrency's performance. This trend is likely to continue with the introduction of ETH ETFs, indicating that overall crypto ETF flows will remain important for returns.

Reports indicate that robust conversations are ongoing behind the scenes between regulators and ETF providers, which include nine fund providers with applications pending at various stages. Past approvals for Bitcoin ETFs suggest that simultaneous launches for ETH ETFs are likely.

Historical data from Citi shows that net flows into spot Bitcoin ETFs materially influence cryptocurrency returns. For instance, net BTC ETF inflows totaled $12.9 billion through May 20, translating to a roughly 6% rally in Bitcoin per $1 billion of flow. Assuming similar market-cap-adjusted flows for ETH, estimated inflows could range between $3.8 billion to $4.5 billion, potentially driving ETH prices up by 23-28%.

Several factors could impact these estimates, including differing demand for ETH compared to BTC, rotation from BTC to ETH among existing ETF holders, outflows from existing ETH funds upon conversion, and rapid positioning build-up ahead of SEC approval.

In the long term, Citi analysts said that Bitcoin and Ethereum are expected to remain highly correlated, driven by macroeconomic factors. Despite differing on-chain activity and potential use-cases, such as Bitcoin's role as "digital gold" and Ethereum's smart contract functionality, sentiment, adoption, and further use-case development remain crucial for both cryptocurrencies.

"We expect the major tokens to remain highly correlated and continue to be driven by macro forces over the longer term," Citi memo concludes.

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Citi discusses Ethereum ETF: Buy the rumor, sell the fact? - Investing.com