SEC Deliberates on Spot Ethereum ETF Deployment: Regulatory Hesitation?

The SEC has extended the deadline for approving or rejecting the Ethereum ETF, with expectations leaning towards a rejection of the proposals by VanEck and ARK.

The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision on the Galaxy Invesco application for a spot Ethereum ETF. July 5th has been set as the new date for the final decision.

Applications for ETFs from other giants such as BlackRock, Fidelity, Franklin Templeton, Hashdex, and Ark 21Shares have also been delayed.

Why Has the SEC Postponed the Spot Ethereum ETF Decision?

The SEC has extended the deadline to approve or reject the spot Ethereum ETF by another 60 days. The decision on the Invesco Galaxy spot Ethereum ETF proposal is scheduled for July 5th.

The time taken by the commission to approve or reject the Ethereum ETF is longer than the time spent approving the Bitcoin ETF in January 2024. Many industry experts anticipate that the SEC will reject these ETFs for various reasons.

A lack of public participation, mechanical reasons, and ongoing legal battles between Consensys, a major supporter of Ethereum, could be potential reasons for non-approval.

According to recent reports by Reuters, the SEC may later this month reject the applications by VanEck and ARK. However, BlackRock CEO Larry Fink and Coinbase Chief Legal Officer Paul Grewal remain hopeful.

“Even if the underlying cryptocurrencies are classified as unregistered securities, there is still a possibility for the launch of a spot Ethereum ETF,” stated Larry Fink.

Moreover, Paul Grewal has indicated that the SEC lacks a reasonable explanation for rejecting the ETH ETF applications.

James Seyffart’s View on Ethereum ETFs Bloomberg ETF analyst James Seyffart has also discussed Ethereum ETFs in the past.

“This is what the table looks like at the moment. This has not changed our view. We still believe that we may see a denial in May. (Although I still need to read more of this document, but today I’m on the road),” Seyffart tweeted on March 27, 2024.

Furthermore, Bloomberg ETF senior analyst Eric Balchunas has lowered the positivity surrounding the spot Ethereum ETF from 50% to 35%.

A Glimpse at Spot Ethereum ETFs Spot Ethereum ETFs offer investors an excellent way to directly invest in the corresponding digital asset without any purchase or holding. In short, it is an Ethereum investment tool that provides investment in digital assets.

Additionally, Hong Kong is the first country globally to accept and approve an Ethereum ETF.

Sentiment: Positive