The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has announced that the agency is preparing to approve investment funds that track Ethereum, the second-largest cryptocurrency by market capitalization. This move is seen as a significant step towards greater mainstream access to the cryptocurrency market.

Gensler's announcement came during a congressional hearing, where he was grilled by lawmakers on the SEC's stance on cryptocurrency regulation. Senator Bill Hagerty (R-TN) pressed Gensler on why the agency had not yet fully approved investment funds that track Ethereum, given a recent court ruling that found the SEC's disapproval grounds unwarranted.

Gensler responded that while the SEC had approved some investment products related to Ethereum, the agency was still working with fund issuers to finalize the necessary paperwork. He expressed optimism that the remaining hurdles would be cleared in the coming months, paving the way for the launch of Ethereum investment funds.

The SEC chair's comments have been welcomed by the cryptocurrency industry, which has long argued that greater regulatory clarity and access to mainstream investment products are essential for the market's growth. The approval of Ethereum investment funds is seen as a significant milestone in this journey, as it would offer investors a more straightforward way to gain exposure to the cryptocurrency market.

However, some lawmakers have expressed concerns that the SEC is not doing enough to establish clear rules for the cryptocurrency industry. Hagerty argued that the agency's lack of action is forcing innovation offshore, where other jurisdictions are establishing clearer guidelines for the sector.

Gensler pushed back against these criticisms, emphasizing that the SEC is working hard to ensure that the cryptocurrency market is subject to appropriate safeguards. He noted that the agency has approved numerous investment products related to cryptocurrencies and is actively engaging with industry stakeholders to establish clear guidelines for the sector.

The launch of Ethereum investment funds is expected to attract significant interest from institutional investors, who have been waiting for clearer regulatory guidance before entering the cryptocurrency market. The move is also expected to boost the price of Ethereum, which has been trading sideways in recent months.

Overall, Gensler's announcement is seen as a positive development for the cryptocurrency market, signaling that the SEC is willing to engage with the industry and establish clearer guidelines for investment products related to cryptocurrencies. As the market continues to evolve, it is likely that we will see further announcements from regulators and industry stakeholders alike, shaping the future of cryptocurrency investment and access.