Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), refused to reveal on Friday whether the SEC will approve the application for an Ethereum spot ETF. Earlier this month, the SEC postponed the applications of BlackRock and Fidelity for the second time and inquired about the public’s concerns regarding the potential fraud and manipulation of Ethereum’s Proof of Stake (PoS) mechanism, indicating that the approval of an Ethereum spot ETF in May remains uncertain.
Table of Contents:
SEC postpones BlackRock and Fidelity’s Ethereum spot ETF applications this month
Gensler: Cryptocurrency space is filled with abuse and fraud
Experts have different opinions on the approval of Ethereum spot ETF
Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), evaded the question of whether the SEC is likely to approve an Ethereum spot ETF. In an interview with Yahoo Finance yesterday, when asked about the SEC’s stance on an Ethereum spot ETF, he reiterated:
“When interviewed last month, Gensler emphasized that the decision to approve a Bitcoin spot ETF in January does not represent the SEC’s endorsement of digital assets, nor does it necessarily mean that they will treat Ethereum in the same way as Bitcoin in the future.”
Background Information:
Gary Gensler: Don’t get too excited! Approving Bitcoin “does not mean” SEC will approve Ethereum spot ETF, as cryptocurrencies are filled with fraud and manipulation.
After BlackRock and Fidelity submitted applications for an Ethereum spot ETF to the SEC in November last year, other financial institutions such as Hashdex, ARk/21Shares, and VanEck followed suit. Currently, there are 8 Ethereum spot ETF applications, but the SEC has repeatedly postponed its decision in recent months. The most recent announcement was on May 4th, stating the postponement of the decision on BlackRock and Fidelity’s applications.
The SEC also sought public opinions on whether to approve these two ETFs, specifically inquiring about concerns regarding Ethereum’s PoS mechanism and its susceptibility to fraud and manipulation.
Another point raised by Gensler in the interview on Friday was his criticism of the “abuse and fraud prevalent in the entire cryptocurrency space.” While Bitcoin reached a new all-time high this week, he urged investors to recognize that Bitcoin is a “highly speculative and volatile underlying asset.”
The market’s optimistic expectation for the approval of an Ethereum spot ETF by the SEC has also become a catalyst for Ethereum’s surge to $4,000 recently. However, experts have different opinions on whether the Ethereum spot ETF will pass in May.
James Seyffart, an ETF analyst at Bloomberg, expressed optimism in January, stating that when the SEC approved 9 Ethereum-related futures ETFs last year, it “implicitly” recognized Ethereum as a commodity. This suggests that the first Ethereum spot ETF could be listed this year. In late January, he estimated a 60% chance of approval in May. However, he also acknowledged that the SEC still has many ways to continue delaying the decision. If not approved in May, it could potentially be delayed until 2025.
On the other hand, several institutions hold a pessimistic view of the SEC’s approval in May. Mark Yusko, Founder and CEO of Morgan Creek Capital, and analysts at JPMorgan both expect the probability of an Ethereum spot ETF approval in 2024 to be less than 50%.
Fox Business reporter Eleanor Terrett quoted insiders in January, revealing that the SEC’s current stance leans towards “forceful rejection.”
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