SEC has once again delayed the applications for Ethereum spot ETFs from Fidelity, BlackRock, and Grayscale. However, market analysts believe that this was expected, and the key date to watch is in mid-May.
Following the approval of a Bitcoin spot ETF in the United States, there is widespread optimism that an Ethereum spot ETF will also be approved this year. However, the U.S. Securities and Exchange Commission (SEC) stated that it is still carefully considering the relevant proposals. After delaying the applications from Fidelity and BlackRock, the SEC has now further delayed the application from Grayscale to convert its Ethereum Trust product (ETHE) into a spot ETF.
Questioning the vulnerability of the PoS mechanism to manipulation, the SEC issued an order yesterday, requiring the proposal to undergo the process and solicit public opinions. In addition, the SEC specifically asked about Ethereum’s proof-of-stake mechanism in the document and raised concerns about whether the “control or influence concentration” of ETH by a few individuals or entities could make the fund susceptible to fraud and manipulation. According to the SEC, the public comment period is 21 days, and the rebuttal period is 35 days.
The key date is on May 23rd. In fact, prior to Grayscale, the SEC has also delayed decisions on Ethereum spot ETF proposals from BlackRock and Fidelity within the past week. Currently, analysts hold both optimistic and pessimistic views on whether a spot Ethereum ETF will be approved soon after approving a spot Bitcoin ETF earlier this month.
However, Bloomberg ETF analyst James Seyffart suggests that the SEC’s delays on the spot Ethereum ETF could occur sporadically over the next few months, with the next key date being May 23rd.
Whether ETH is considered a security becomes a crucial factor for the approval of a spot ETF. Among all cryptocurrencies, only Bitcoin is currently regarded by the SEC as a commodity with a store of value. Ethereum still has the potential to be classified as a security, which is another major obstacle for the SEC to approve an Ethereum ETF.
It is worth mentioning that Gensler’s opaque stance on whether Ethereum is a potential security and its potential impact on the decision, while the U.S. Commodity Futures Trading Commission (CFTC) leans towards viewing ETH as a commodity, along with last year’s court ruling in favor of Ripple regarding XRP not being a security in secondary market trading, will make “Gensler’s adoption of the position that the majority of digital assets are securities a tough battle.”
Related reports:
– When will the Ethereum spot ETF be approved? 52% of the survey respondents are optimistic before the end of 2024; TD Cowen, JPMorgan: Not approving soon.
– Bloomberg analyst: Ethereum spot ETF is 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 for listing this year! Bloomberg analyst: SEC has implicitly recognized ETH as a commodity.
– Gotcha! SEC Chairman Gary Gensler’s “2018 assertion” that Ethereum is not a security.