The SEC has once again delayed the applications for Ethereum spot ETFs from Fidelity, BlackRock, and Grayscale. Market analysts believe this was expected, and the key date to watch is mid-May.
Following the approval of a Bitcoin spot ETF in the US, there has been widespread optimism that an Ethereum spot ETF will also be approved this year. However, the US Securities and Exchange Commission (SEC) stated that it is still carefully considering the proposals. After delaying the applications from Fidelity and BlackRock, the SEC has now further delayed Grayscale’s application to convert its Ethereum Trust (ETHE) into a spot ETF.
Questioning the vulnerability of the PoS mechanism to manipulation, the SEC issued an order yesterday, requesting the proposal to undergo a process and solicit public comments. Additionally, the SEC specifically inquired about Ethereum’s proof-of-stake mechanism and whether the “control or influence concentration” of ETH by a few individuals or entities could pose a risk of deception and manipulation to the fund. According to the SEC, the public comment period is 21 days, with a 35-day rebuttal period.
The key date to watch is May 23, following the recent delays from BlackRock and Fidelity. Analysts have mixed opinions on whether the Ethereum spot ETF will be approved soon, despite the approval of a Bitcoin spot ETF earlier this month. Bloomberg ETF analyst James Seyffart suggests that the SEC’s delays on the Ethereum spot ETF could occur sporadically in the coming months, and the next key date is May 23.
The determination of whether ETH is a security remains a crucial factor for the approval of a spot ETF. Currently, among all cryptocurrencies, only Bitcoin is considered by the SEC to be a commodity with value storage capability, while Ethereum may still be classified as a security, presenting another major obstacle for the approval of an Ethereum ETF by the SEC.
It is worth mentioning that Gary Gensler’s opaque stance on whether Ethereum is a potential security may play a role in the decision. In fact, the US Commodity Futures Trading Commission (CFTC) leans towards considering ETH as a commodity. Additionally, last year’s court ruling on Ripple’s XRP not being a security in secondary market trading adds complexity to Gensler’s position of considering most digital assets as securities.
Related reports:
– When will the Ethereum spot ETF be approved? 52% of respondents in a poll expect it by the end of 2024; TD Cowen, JPMorgan: Not approving soon.
– Bloomberg analyst: Ethereum spot ETF expected to be listed “this year”! Probability of SEC approval in May reaches 70%.
– It’s Ethereum’s turn! Spot ETF expected to be approved and listed this year! Bloomberg analyst: SEC has tacitly recognized ETH as a commodity.
– Gotcha! SEC Chairman Gary Gensler’s “2018 claim” that Ethereum is not a security.