SEC Delays Spot Ethereum ETFs Decision for Invesco and Galaxy

UTC by Benjamin Godfrey · 3 min read
SEC Delays Spot Ethereum ETFs Decision for Invesco and Galaxy
Photo: Depositphotos

Despite the delays, there’s optimism in the financial sector regarding Ethereum’s potential price rise.

The US Securities and Exchange Commission (SEC) has once again delayed its decision on the spot Ethereum (ETH) Exchange-Traded Fund (ETF), proposed by Invesco and Galaxy Digital, according to a filing. This news comes amidst a surge in Ethereum’s price, making it one of the biggest gainers among the top coins by market cap in the past day.

It recorded a 1.6% rise to trade at $2,359, according to CoinMarketCap’s data.

Reactions on the SEC’s Ethereum ETF Delay

The proposed ETF by Invesco and Galaxy Digital aims to provide professional investors with direct exposure to spot ETH, filling a gap in the market where currently, Ether futures listed on the Chicago Mercantile Exchange (CME) are one of the few avenues for regulated U.S. investors and funds to bet on Ethereum’s growth.

Reacting to the SEC’s decision, Bloomberg’s ETF Analyst, James Seyffart, stated in a post on X that the delay was 100% expected. He further commented that more delays are anticipated in the coming months, emphasizing that the important date to watch for spot Ethereum ETFs is May 23rd, coinciding with VanEck’s final deadline.

In contrast, TD Cowen, an investment bank, suggests a cautious approach regarding SEC approvals, indicating that the regulatory body may take time before granting further approvals for spot Ethereum ETFs. The bank’s analysis highlighted a political consideration, suggesting that SEC Chairman Gary Gensler might find it challenging to approve a spot Ethereum ETF given that his tenure runs until June 2026.

The uncertainty surrounding Gensler’s stance on Ethereum’s status as a potential security adds to the complexity of the situation. However, recent developments, such as the classification of ETH as a commodity by the Commodity Futures Trading Commission (CFTC) and Ripple Lab Inc’s court victory with XRP, may influence Gensler’s decision-making process.

Notably, the SEC previously postponed BlackRock Inc‘s (NYSE: BLK) spot ETH ETF decision, as well as Grayscale Investments’ application to convert its Ethereum trust product (ETHE) into an ETF.

Despite the delays, there’s optimism in the financial sector regarding Ethereum’s potential price rise. Financial giants anticipate a surge of up to 70% in Ethereum’s value as ETF applications are expected to be approved in May. Standard Chartered Bank predicts ETH prices to either track or outperform Bitcoin in the lead-up to the anticipated approval date.

Global Interests in Ethereum ETFs

Meanwhile, outside the US, interest in spot Ethereum ETFs is growing. Hong Kong-based financial services giant Venture Smart Financial Holdings Ltd (VSFG) stated in an earlier report by Coinspeaker that it is planning to apply for a spot Ethereum ETF in the first quarter of 2024.

Similarly, Chinese asset management firm Harvest Fund is also eyeing entry into the Hong Kong market with its spot Bitcoin ETF, reflecting the increasing acceptance of crypto investment products in the region.

With regulatory hurdles still prevailing, the timeline for the launch of spot Ethereum ETFs remains uncertain. However, the growing interest from both institutional investors and financial institutions indicates a strong appetite for Ethereum-based investment products, which could potentially drive further adoption and growth of the crypto market.

Funds & ETFs, Market News, News
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