Insiders reveal that the US Securities and Exchange Commission (SEC) is likely to reject the approval of spot Ethereum Exchange-Traded Funds (ETFs) next month. The SEC’s approach towards approving these ETFs has been uncertain, with delays and a lack of interest in specifics.
Sources familiar with the matter suggest that the SEC’s stance on categorizing Ethereum (ETH) as a security has contributed to the delays in approving spot Ether ETFs for multiple issuers.
US SEC Likely to Deny Spot Ether ETFs, Reuters Reports
According to recent reports from Reuters on April 25, issuers of spot Ether Exchange-Traded Funds (ETFs) and other firms anticipate that their applications will be denied by the U.S. Securities and Exchange Commission (SEC) next month. The SEC has reportedly held unfavorable meetings with these entities in recent weeks, leading to expectations of denial.
Several prominent issuers, including BlackRock, Grayscale, VanEck, and Ark Invest, have submitted applications to the SEC to approve and list ETFs tracking the spot prices of Ethereum (ETH), similar to spot Bitcoin ETFs. VanEck and Ark Invest are among the first in line for the SEC’s decision, scheduled for May 23 and May 24, respectively.
Insiders familiar with the discussions have revealed that the SEC and its staff have shown little interest in the spot Ether ETF and its potential. Participants described the meetings as one-sided, indicating a lack of engagement from the regulatory side.
Todd Rosenbluth, head of ETF analysis at data firm VettaFi, expressed skepticism about the approval timeline, suggesting that it is more likely to be delayed until later in 2024 or beyond. The regulatory outlook remains uncertain, with SEC Chairman Gary Gensler adopting a stance similar to that taken against spot Bitcoin ETFs over the past decade.
The expected denial of spot Ether ETFs could be a setback for the crypto market, as many believe that such ETFs are instrumental in driving the adoption of cryptocurrencies, as evidenced by the success of spot Bitcoin ETFs. Additionally, approval of spot Ether ETFs could pave the way for similar offerings for other cryptocurrencies like XRP and SOL.
The SEC’s only disclosed meeting related to spot Bitcoin ETFs occurred in March, where the SEC and Coinbase discussed Grayscale’s application to convert its Ethereum Trust into a spot Ether ETF.
Source: Polymarket
Hong Kong Approves Spot Bitcoin and Ether ETFs, Listing Delay Spurs Reaction
Despite Hong Kong’s regulatory approval of spot Bitcoin and Ether ETFs, with listing expected on April 30, traders have reacted swiftly to news of a delay.
In response to the delay, the price of Ether (ETH) has dropped by over 5%, currently trading at $3,097. Within the past 24 hours, ETH has ranged between a low of $3,074 and a high of $3,292, reflecting heightened volatility. Additionally, trading volume has surged by 35% over the same period.
The Ethereum futures Open Interest (OI) has also experienced a decline in the last hour, with a 24-hour decrease of over 1%. As of the latest data, there are 3.49 million ETH futures OI valued at $10.82 billion.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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