The U.S. Securities and Exchange Commission (SEC) currently maintains a reserved attitude towards approving Ethereum spot ETFs. Chairman Gary Gensler reiterated recently that the SEC will only approve Bitcoin as a non-security commodity and should not be seen as support for other cryptocurrencies.
SEC Delays BlackRock’s Ethereum Spot ETF
Optimistic View on Ethereum Spot ETF
Pessimistic View on Ethereum Spot ETF
After the approval of the U.S. Bitcoin spot ETF this month, the market eagerly anticipates the approval of an Ethereum spot ETF this year. Bloomberg ETF analyst Eric Balchunas stated earlier this month that there is a 70% chance of SEC approval in May. However, yesterday, Fox Business reporter Eleanor Terrett cited insiders disclosing that the SEC’s current position is leaning towards a “forceful rejection”.
In response, SEC Chairman Gary Gensler maintained his usual cautious stance. When asked about his views on an Ethereum ETF during a media briefing yesterday (24th), he stated that two weeks ago (12th), in an interview with CNBC, he emphasized that the SEC’s decision to approve a Bitcoin spot ETF was based on Bitcoin being a “non-security commodity token”, which makes it similar to other commodities such as gold and silver, which we have approved for spot ETFs in the past.
Although the SEC has already approved Ethereum futures ETFs, which indirectly acknowledges ETH as a commodity rather than a security, the SEC has not reached a clear conclusion on this matter, which could be a reason for rejecting the approval of an Ethereum spot ETF.
Currently, there are a total of 7 Ethereum spot ETF applications awaiting SEC approval, including BlackRock, Fidelity, Grayscale, VanEck, Ark/21Shares, Invesco/Galaxy, and Hashdex. The latest news indicates that the SEC has extended the review period for BlackRock’s application by another 45 days until March 10th, and it also recently delayed Fidelity’s application until March 5th. Bloomberg analyst James Seyffart stated that the delay of Ethereum spot ETFs will continue sporadically in the coming months, with May 23rd being an important date to watch.
However, this does not affect the optimistic voices in the market that the product will be approved within the year. Some viewpoints suggest that the approval process for an Ethereum spot ETF will be similar to that of the Bitcoin spot ETF.
Matt Kunke, a research analyst at cryptocurrency market maker GSR, stated yesterday (24th), “If the current Ethereum spot ETF applications are rejected by the SEC in May, an appeal will be inevitable. In that case, he believes that the SEC will choose the path of least resistance to approve these products while maintaining a skeptical stance toward other cryptocurrencies.”
SEC Commissioner Hester Peirce, known as “Crypto Mom” in the community, holds a similar view. In an interview with Coinage on Tuesday, she also cited last year’s successful ruling on Grayscale’s transition from GBTC to Bitcoin spot ETF, stating that an Ethereum spot ETF does not need to go through court litigation to obtain approval.
On the other hand, given the SEC’s overall stance on cryptocurrency ETFs, some analysts remain skeptical about the imminent launch of an Ethereum spot ETF.
Anthony Scaramucci, founder and managing partner of SkyBridge Capital, stated, “I’m not quite sure when the Ethereum spot ETF will be launched, but I think it will be approved eventually.”
Mark Yusko, Founder and CEO of Morgan Creek Capital, who was once bullish on a Bitcoin spot ETF, also holds the same view. In an interview with Cointelegraph on the 18th, he said, “As Gary Gensler implied, even if they approve the Bitcoin spot ETF application, the SEC still has biases against cryptocurrencies. He also pointed out that the SEC currently only considers Bitcoin as a “commodity” with value storage capabilities, while Ethereum may be considered a security, which is the main obstacle to the approval of an Ethereum ETF.
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