Federal regulators on Thursday approved an investment product tied to the cryptocurrency Ether, the most valuable digital asset after Bitcoin, in a major boost for the crypto industry.

The Securities and Exchange Commission said a group of exchanges could begin listing investment products known as exchange-traded funds, or E.T.F.s, linked to the price of Ether. The products would offer an easier and simpler way for people to invest in crypto, potentially boosting prices and promoting wider adoption of digital currencies.

In January, the S.E.C. approved similar products that track the price of Bitcoin, leading to a flurry of new investment that helped propel Bitcoin’s price to a record high.

The impact of the Ether approval could take longer to hit the market. Before the exchanges can start offering Ether E.T.F.s, the S.E.C. must also approve a separate set of applications from companies that want to issue them, including from major financial firms like BlackRock and Franklin Templeton. That process could take weeks or months, according to financial experts.

An S.E.C. spokeswoman said the agency had no comment beyond a formal order approving the products.

The news prompted celebration in the crypto industry. A representative for 21Shares, one of the companies seeking to offer the Ether investment product, called it an “exciting moment for the industry at large.”

But industry critics called the approval a dangerous development that would encourage wider investment in a volatile market.

“The S.E.C. failed to live up to its mission to protect investors and the markets,” Benjamin Schiffrin of Better Markets, a nonprofit that fights for stricter financial regulations, said in a statement.

Offered by mainstream financial services firms, E.T.F.s are essentially baskets of assets — rather than buying the assets directly, customers buy shares in these baskets. The products are easy to trade, from brokerage accounts with companies like Vanguard or Charles Schwab, and are popular with wealth advisers and other financial mangers.

In the crypto world, E.T.F.s offer another key advantage: simplicity. Rather than navigating the complexities of an online crypto wallet, a customer could go online and buy shares in a Bitcoin or Ether E.T.F. alongside stocks traded on Wall Street.

For years, crypto advocates have seen these products as a promising way to encourage wider use of digital currencies. Before the Bitcoin E.T.F.s were approved, crypto companies battled the S.E.C. in the courts, securing a legal victory in August that forced the agency to allow the products.

The Bitcoin E.T.F.s have proved to be enormously popular, attracting billions of dollars in investment.

The price of Ether has rebounded over the last few months, after a crypto downturn that started in 2022. Ether currently trades at about $3,800 per coin, more than 20 percent off its high of just under $4,900.

That’s a small fraction of the price of Bitcoin, which trades at about $68,000 per coin.