Ethereum Surges To All Time High As SEC Considers Ether-based ETF

Tyler Durden's picture

Yesterday holders of bitcoin got an unexpected, if pleasant surprise courtesy of the SEC which announced that two months after deciding against a bitcoin ETF, it would review its decision, suggesting that after several failed attempts, Bitcoin may surge even more soon should the long-awaited Bitcoin-based ETF be ultimately approved. Whether or not it is a good thing for the cryptocurrency in the long-run to get such approval, which would expose bitcoin to the vagaries of volatile retail money flows and even greater volatility, is yet to be determined, but the price of bitcoin liked it, and earlier today it rose to near record highs, rising above $1,300 just shy of all time highs.

 

Then today, in similarly favorable news for holders of Bitcoin's smaller peer, Ethereum, it was revealed that the SEC had quietly begun the process of considering whether to approve an exchange-traded fund for the cryptocurrency ethereum. Recall that ethereum exploded higher at the end of February when it was revealed that a consortium of venerable corporations including JPM, Intel, Microsoft and many others, had created a blockchain alliance based on the ether technology.

In same ways, whereas bitcoin has been seen as the more venerable, if "renegade" cryptocurrency, ether has developed the reputation of the smaller, better-behaved relative, one which is backed by major banks and corporations, which in the past has distanced itself from bitcoin due to limitations associated with its specific blockchain technology.

While ether and bitcoin are similar, they are also very different. First of all, none of the big Chinese exchanges lists ether for trading (which means it is only a matter of time before they do) sending it into orbit as the traditional Chinese bubble stampede does. Second, the two biggest ether exchanges are Coinbase and Kraken, both regulated.

Ethereum is backed by almost all household brands who have formed an alliance in support of the platform. Microsoft is a big proponent, with ether’s protocol added to Hyperledger, the open-source cross-industry blockchain development effort headed by the Linux Foundation.

Whether that makes an ether-based ETF more likely remains to be seen. What we do know is that the backers of the EtherIndex Ether Trust first filed in July 2016, seeking to launch an ETF backed by a cache of ethers on the NYSE Arca exchange, according to Coindesk. NYSE Arca then filed for a proposed rule change clearing the way for the ETF listing in December, according to a notice published in January.

Then, in a new notice from the SEC, the agency announced that it has begun considering whether to approve the proposed ETF, opening up a comment period for outsiders. This is what the SEC said:

"Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change."

As Cryptocoinnews adds, "Joseph Quintilian and Gregory DiPrisco have founded EtherIndex which is to act as a trust for an Ethereum ETF with Coinbase acting as a custodian and price based on GDAX while Kraken is to act as back-up, both regulated exchanges. Not much is known about the two, but Quintilian appears to be a Wall Street banker or trader, seemingly very well connected and apparently politically involved. He is a board member of Concord 51, a political action committee that targets young professionals, and, according to their LinkedIn, “not just the young Republican establishment, but also the unengaged.”

The two have also founded Axiom Markets, “a proprietary energy trading firm,” according to their website, and, interestingly, they say “Axiom Markets has melded technology and trading together. Our programmers and traders worked as a team during the development and implementation of our in-house proprietary platform.”

Like bitcoin, an ether-based ETF remains subject to final SEC approval. However, the mere likelihood, has sent the price of ethereum soaring from below $50 which had proven a solid resistance level in the past month, to well above $50 in the past 24 hours. It was last trading at $54.40.

As coindesk adds, the SEC is also seeking comments and feedback on which approach it should take, though notably, a previous comment solicitation went unanswered, according to the agency.

In the past 6 weeks the SEC turned down two bitcoin-based ETFs due to concerns over market surveillance and insufficient regulation. However, with a "credible" consortium backing ethereum, will the SEC be forced to finally concede, especially since ethereum appears to not have made headway into China... yet.

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Raffie's picture

U can still buy ETH.....

pathosattrition's picture

I'm glad I bought from $11 all the way down to $6. 

Jim Sampson's picture

Wait...  they wont let Bitcoin but they might Ethereum?  Yeah...  sounds legit.  I'll keep my phys.

seek's picture

Ethereum is the devil they know (cough control). You bet it's legit. The need to neuter BTC before it gets out of hand, and .gov/.bankcoin, e.g. ETH, is the answer.

SILVERGEDDON's picture

Digital clown bucks by any name - is ponzi electrons.

Oh, wow - just grabbed a hunskie outta thin air.

Aaaannnnnddd - it's gone.  

Donald Trump's picture
Donald Trump (not verified) SILVERGEDDON Apr 26, 2017 5:13 PM
Notveryamused's picture

I'm long ETH because probability of approval is much higher because 'JP Morgan etc.' but there are also a slew of very cool projects about to use the ETH smart contract system & it will soon be switching to a much lower inflation model. However ETH is really a fork that rolled back the DAO hack. (Reversing transactions you don't like is a big no in crypto) The unreversed ETH is trading as ETC and grayscale.io launched a large ETC investment trust yesterday. ETH will also never be accepted as a currency but just fuel that runs their burgeoning dapp ecosystem so there will always be a place for a limited digital immutable currency like BTC or perhaps LTC or something more private if BTC is unable to upgrade.

Bunga Bunga's picture

When you own it you controll it - that is why Wall St loves Ethereum. Ethereum is switching to Proof of Stake this year, which means you have power over the code once you invested into Ethereum, not like Bitcoin's Proof of Work, where you have to invest constantly into mining. Ethereum has experienced 5 hard forks so far, which means a cartel can easily censor transactions and prevent technological innovations.

philipat's picture

I truly don't understand why anyone would WANT a crypto ETF, unless it comprised ALL crypto currencies as a hedge. But for a single crypto, there are no storage charges like with physical metals and you can just as easily buy it and hold it yourself. So why would anyone pay entry/exit charges to buy an ETF when you can do the same thing yourself free of any Wall Street commissions?

Bunga Bunga's picture

Because Wall St are government regulated and they are not allowed to trade on exchanges.

ebworthen's picture

When I read "Ethereum" I was sure this was an "Onion" article.

When does the $1 Trillion Ethercoin get "minted".

Black Tulips on sale at my local nursery.

rejndjer's picture

u are logically wrong. what stops bankers from investing money in mining, that way they could control bitcoin as well.

Bunga Bunga's picture

Mining is a small margin business and the initial cost to get significant mining power in Bitcoin are huge already. Owning Bitcoins give you no power. In PoS Ethereum you just have to have your stake and that's it for the most part.

Havana White's picture

"ETH will also never be accepted as a currency ."

Wasn't intended to be a currency but very much is already, and the upcoming Raiden Network is all about ETH as a currency.

Robert_Bichen's picture


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alt right dude <<< CHRONIC SPAMMER (spawn of XYTHRAS)
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SolidAssets  <<< CHRONIC SPAMMER  (spawn of XYTHRAS)

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Global Douche's picture

Tell that to your banker when they enter digits into a keyboard and POOF! (using best AOL'ish type voice) You Have Money!

The difference? Fed makes digital out of thin air, called Reserve Banking. With Bitcoin, it's quite the opposite!

aurum4040's picture

Hey Tyler - I tipped you off on this via Twitter nearly 24 hours ago, wheres the hattip?....And you idiots here will rue the day you didnt invest in ETH...Not ETC but ETH. 

MrYukonC's picture

They can't control Ethereum any more than they can control Bitcoin.

The reason many large corporations are taking interest in and finding value in Ethereum, is because after 8+ years of first-generation tech (i.e. Bitcoin) cryptocurrency and blockchain technology have finally innovated enough to advanced to the next stages.

Enter Ethereum.

Ethereum sports an average block/transaction time of 15 seconds versus Bitcoin's 10+ minutes (on a good day).

Ethereum will eventually transition to a security model that will allow it to further reduce its block/transactions times to 3-4 seconds.

Ethereum is fully programmable via its Solidity (and others) smart contract language(s).  Thus, there is essentially an infinite number of things that you can do with Ethereum that you can't and never will be able to do with Bitcoin.

I'm not suggesting that crypto is the end all, be all.  But it's definitely early days and all very exciting with tons of potential.

Lots of ground-floor opportunities here and now for savvy, tech-minded investors.

freet0pian's picture

That's not nice for your fellow ZH'ers. Selling a "ground-floor" when you probably bought somewhere around 30 cents. Have some honesty.

Bunga Bunga's picture

Ethereum switches to PoS, which means Ethereum crowdsale holders will have control over the code. Bitcoin won't go away like http/www never went away and got replaced, although it was predicted many times. Innovations does not stop with Bitcoin, the next big leap is Lightning Network and smart contracts. Buterin is just a smart guy, he offers some what Wall St likes, because they can control it. But I doubt that the public will fall for it, since they can liberate themselves from the middle men through Bitcoin.

dasein211's picture

There's also ripple and Dash. Ripple can already handle equal or more transactions than Visa. Ripple and Bitcoin are like cars and ethereum is the road. Dash is also opening the evolution wallet/program at the end if the year. My god if half the dumbass commenters in this blog read as much as they bitched they'd all be retired by now.

Crash Overide's picture

They don't have to fall for it, it will be integrated into a smart phone app where they can just push buttons and scan QR codes.

Like it or not things seem to be moving to the blockchain.

Hedge accordingly...

rejndjer's picture

" Bitcoin won't go away like http/www never went away" since when is never lasting less then 30 years? While i agree with you that we should be concerned about all those big corporations (jpmorgan and other banks primarily) jumping on ether horse, i think vitalik and others helping him develop ethereum are also aware of that. for proof u could read vlad zamfir's blog he wrote last month "Blockchains are not toys. They aren’t get rich quick schemes. They aren’t a shiny tool for automating your business processes. They are powerful technology that have the potential to do unspeakable harm. But they can also provide the basis for solutions to serious global problems.". You can read it on his medium, mar3 is date.

Bunga Bunga's picture

If you own it, you control it. Whatever Vitalik thinks is "ethical" doesn't count.

Lore's picture

Lots of "ground-floor opportunities here and now" for vulnerable prey, you mean.  Cryptocurrencies are the "Global Warming" of money. 

Raffie's picture

Big corps bought into ETH which is why it might pass, but if it does it might open the door for BTC to get ETF'd..

 

booboo's picture

At least we knew that canned air was a gag gift in the 70's.

Madison&#039;s_Ghost's picture

It would probably help if you bothered to read even the first sentence, and not just the headline.

nuubee's picture

If they approve an ethereum based ETF while denying a BTC based one, you know which crypto the banking sector has chosen.

Appreciated Chelsea Clinton's picture

ETH has already been chosen by them. It's been publicly noted that a bunch of the big boys (Chase, Microsoft, Santander, etc.) are openly backing it. While this would appear to be shocking to most, it paradoxically wouldn't be shocking at the same time lol.

dasein211's picture

My bet is Ripple for international transactions and ethereum for trades and contracts. Bitcoin Litecoin and Dash for the people. Monero and zcash for illegal stuff. The market Cap for all cryptos is only 31billion. What happens when it gets to 100billion? A trillion? Google alone is 600billion. Apple 800. I just hope people ignore it long enough for me to block up even more!!!!!!!

Tyler Durden's picture

If you read the article, it explains that the banking sector has already chosen.

Bigly's picture

What fun would that be? Besides most people do not have any reading comprehension anyway. See: SAT scores

11b40's picture

40% of Americans are functionally illiterate. Remember that as you read about poll results.

Xatos's picture

No one reads the articles they jump straight down to the comment section which needs to be overhauled, just to make some one-liner that often has nothing to contribute to the story.

 

By the way when the hell are you going to get more shirts in the store? 

Entourage's picture

Unless we get God's attention, we have no hope of damnation or redemption.

Hitlery_4_Dictator's picture

Are you an IKEA super fan? Do you love socialism because that's what they believe in. 

Hitlery_4_Dictator's picture

Was that sacrasm or are you now just finding the light by the way of this website?

Entourage's picture

I have found the light by way of Tyler.

11b40's picture

I did read it. Go away.

Placerville's picture

Minimize the reply chain and force people to post a stand alone comment to be seen. Also votes to move the comment up and down the list, not just in the order it was posted.

TwelveOhOne's picture

User-configurable sorting, so I can see it in chronological, reverse-chronological, highest-voted, lowest-voted, etc.

User-configurable blocking, so I don't ever have to see another "team Xythras" or "GraveDancer" post again.  Ever.

User-configurable content modification, so I can change "fuck" to "f--k" etc.  User can hover to see original (so, perhaps use a different background color, like a highlighter, or perhaps surround it with "[[" and "]]" so "[[f--k]]" and one could hover over it to see "fuck").  This one's probably a lot less important, as ZH is an adult playground.

Have lines down the left side which line up with the comments.  Two reasons: first, it allows one to see at-a-glance how deep the current comment is nested.  Second, can allow the user to click on the space between the lines, to jump up to the comment which started that indent gap (i.e., the comment that aligns with the line immediately to the left of the gap clicked on).

Probably more, these just off the top of my head.  Slashdot and Daily Paul are influences here.

SybilDefense's picture

Yes,. I have some slogan ideas for new t-shirts:

It's not right to hate... It's Left!

And

Zerohedge Viagra Free

Damn, where is that copywrite character when I need it!

 

 

Raffie's picture

Banks like Ripple coin as well.

Global Douche's picture

Yet, it appears both are being favored. Someone has caved in! For them not to include Bitcoin will put a serious hurt on Crypto overall. Not all crypto payment systems accept Ether, nor do they have the same in BitATM's. With that said, if Ether gets the nod and BTC doesn't, that may change quickly!

dasein211's picture

I bet that Fonestar guy is laughing his ass of on his yacht by now.

dasein211's picture

I bet that Fonestar guy is laughing his ass of on his yacht by now.