In a landmark development for Ethereum and the broader crypto market, the U.S. Securities and Exchange Commission (SEC) has reversed its stance and approved the first batch of spot Ethereum ETFs submitted by the world’s largest asset managers.

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“After careful review, the commission finds that the proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange,” the SEC official order (PDF) states.

The newly approved spot $ETH ETFs will allow investors to gain direct exposure to #Ethereum, the second-largest cryptocurrency by market capitalization, without needing to purchase and store the digital asset. This could have tremendous implications across financial markets, given the asset's popularity and the rapid growth of spot Bitcoin ETFs, the fastest in history.

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The rapid change in approval odds for these ETFs surprised everyone this Monday when Bloomberg analysts Eric Balchunas and James Seyffart raised their approval odds from 25% to 75%.

The SEC approval comes a day after the United States House of Representatives members voted in favor of legislation that is believed to provide more regulatory clarity to the cryptocurrency industry. (However, the bill still needs to pass the Senate and be signed into law.)

There has been a long debate on whether Ethereum should be classified as a security or a commodity. Recent regulatory developments and the approval of spot ETFs suggest that regulators may now lean towards regulating $ETH as a commodity. At the same time, the removal of staking is the most notable amendment across several filings.

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The $ETH price has remained mostly flat after the spot ETFs were approved for trading in the United States, following a huge spike earlier this week. Meanwhile, $ETH exchange net flows have hit the highest level since March, indicating potential selling activity in the market.

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