The US Securities and Exchange Commission (SEC) has given the go-ahead for spot Ethereum exchange-traded funds (ETFs), leaving many wondering what led to this move. Analysts at Bernstein have shed some light on the factors that likely influenced the SEC's decision.

Initially, some thought that political pressure from Democrats ahead of the US Presidential elections played a role in the SEC's approval. However, Bernstein's experts believe this theory doesn't hold water. Instead, they suggest that the SEC was faced with a tough decision due to the similarities between Ethereum and Bitcoin, including their correlations with spot and futures markets and the presence of active futures products on the Chicago Mercantile Exchange. This likely led the SEC to take a pragmatic approach to avoid potential legal battles.

Despite the surprise approval, Bernstein notes that market expectations were largely leaning towards a rejection. However, ETF issuers were asked to resubmit necessary documents just days before the approval, indicating a sudden change in the situation. The approved ETFs are now waiting to finalize their registration statements, a process that could take several weeks to months.

While Ethereum ETF inflows are expected to be lower than those of Bitcoin ETFs, Bernstein anticipates pent-up demand from similar market participants, potentially leading to positive price movement for ETH leading up to the ETF launch.

In conclusion, the SEC's approval of spot Ethereum ETFs marks a significant move for the industry, driven by a nuanced decision-making process beyond political influence. As the ETFs prepare to launch, market participants eagerly await the potential impact on the price of ETH.