As expected by the market, the U.S. Securities and Exchange Commission (SEC) announced on Monday its decision to delay the approval of the Ethereum spot ETF applications submitted by BlackRock and Fidelity. It is widely believed in the market that May will be a crucial period to determine whether the Ethereum spot ETF will be approved or not.
On the same day, the SEC also announced the delay of the decision on Fidelity’s Ethereum spot ETF application and sought public opinions on whether to approve this ETF. The public can submit comments on these two ETFs within 21 days, and the rebuttal period will last for 35 days.
BlackRock and Fidelity submitted their Ethereum spot ETF applications to the SEC in November last year, followed by financial institutions such as Hashdex, ARk 21Shares, and VanEck. Currently, there are 8 Ethereum spot ETF applications, but the SEC has recently postponed its decisions on applications from Grayscale, Invesco/Galaxy, and others.
According to Bloomberg analyst James Seyffart, he previously stated that he expects more applications to be delayed by the SEC in the coming months. Currently, the only important date for the Ethereum spot ETF is May 23, as it is the final deadline for VanEck’s application.
James Seyffart estimated in late January that there is a 60% chance of approval for the Ethereum spot ETF in May. However, he admitted that the SEC still has many ways to continue postponing the decision. If it is not approved in May, it may have to wait until 2025.
Opinions on the approval of the Ethereum spot ETF in May are divided. Jake Chervinsky, General Counsel at Variant, a risk fund, questioned the expectation of the Ethereum spot ETF being approved and listed before May 23, citing legal issues and the policy environment in Washington, which makes it more likely for the SEC to reject or request the withdrawal of the application than the market believes.
Scott Johnsson, a U.S. financial lawyer, recently analyzed the application process of Bitcoin spot ETF as an example and believed that the SEC may deviate from the approval timetable of the Bitcoin spot ETF but will still approve the Ethereum spot ETF. If the Ethereum spot ETF is not approved by May 2024, it will be approved no later than the middle of 2025.
SEC Chairman Gary Gensler previously emphasized that the decision to approve the Bitcoin spot ETF in January does not mean that the SEC recognizes digital assets or that the SEC will necessarily treat Ethereum in the same way as Bitcoin in the future. He reiterated that most cryptocurrencies are unregistered securities, and the agency has a responsibility to protect investors from fraud and market manipulation.