By
Godfrey Benjamin
April 29th, 2024
Despite approving spot Bitcoin ETFs in January, the SEC approaches Ether cautiously.
The wait for an Ether exchange-traded fund (ETF) in the United States continues to drag on, with key Issuers behind the recently approved spot Bitcoin ETFs expressing doubt regarding the Securities and Exchange Commission’s (SEC) readiness to approve similar offerings for Ethereum (ETH) in the future.
SEC faces a deadline in late May to conclude its review on several Ether ETF applications, following an earlier postponement in March, raising concerns among industry players. Key players like BlackRock, Fidelity, and VanEck, which successfully launched spot Bitcoin ETFs in January, now confront an uncertain future with their Ethereum ETF proposals.
“We were the first to file as well for Ethereum in the US,” said VanEck CEO Jan Van Eck at a recent crypto event, expressing pessimism about the May deadline. “I guess, to probably be rejected.”
The SEC’s silence regarding Ether ETFs starkly contrasts the approval of long-awaited Bitcoin ETFs. Previously, the agency actively engaged with potential issuers, offering feedback that fostered a sense of progress. Conversely, the current lack of communication fuels concerns and uncertainty regarding ether ETFs.
“The way the legal process goes is the regulators will give you comments on your application,” Van Eck explained. “Right now, pins are dropping as far as Ethereum is concerned.”
Ether ETF Approval Faces Uphill Battle
Many other experts share the industry’s pessimistic outlook. James Seyffart, an ETF analyst at Bloomberg, explained:
“My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round.”
Eric Balchunas of Bloomberg echoes this sentiment, slashing his previous 50% approval odds to a mere 25%.
Despite approving spot Bitcoin ETFs in January, the SEC approaches Ether cautiously. SEC Chair Gary Gensler has asserted that a substantial portion of crypto assets, potentially including Ether, could be classified as investment contracts under US securities laws. This classification complicates the approval process for Ether ETFs, requiring cautious scrutiny.
Further complicating matters might be the underlying technology powering Ether. Contrasting Bitcoin’s proof-of-work protocol, Ether employs proof-of-stake mechanics. Mognetti voiced skepticism concerning SEC clearance for such stake-based offerings in the near future.
Approval Delay Cast Doubt, Not Denial
The SEC’s hesitation in green-lighting Ether ETFs might curb investors’ enthusiasm, especially after Ether prices spiked post-Bitcoin ETF approval. However, it’s important to note that the SEC has not explicitly rejected any Ether ETF applications. While this path remains rocky, Ether’s rise represents crypto’s resilience.
The issuers’ concerns stem from a lack of clear communication and potential delays, not outright denial. The SEC still has until late May to make a decision, and future developments, such as clearer regulations or adjustments to the applications, could pave the way for eventual approval.
However, the short-term future seems uncertain, and the long-term potential for Ether ETFs persists as favorable, particularly with escalating institutional fascination in the cryptocurrency space.