The U.S. Securities and Exchange Commission (SEC) currently maintains a reserved attitude towards approving Ethereum spot ETFs. Chairman Gary Gensler recently reiterated that the SEC would consider Bitcoin as a non-security commodity before approving it, and it should not be seen as support for other cryptocurrencies.
Summary:
SEC plans to “forcefully reject” Ethereum spot ETF? Insider: Gensler still considers ETH as a security.
Background:
Bankless: When will Ethereum spot ETF be approved?
Table of Contents:
SEC Delays BlackRock’s Ethereum Spot ETF
Optimistic View of Ethereum Spot ETF
Pessimistic View of Ethereum Spot ETF
After the approval of the U.S. Bitcoin spot ETF this month, the market eagerly anticipates the approval of the Ethereum spot ETF this year. Bloomberg ETF analyst Eric Balchunas believed at the beginning of the month that there was a 70% chance of SEC approval in May. However, Fox Business reporter Eleanor Terrett quoted insiders yesterday, stating that the SEC’s current stance leans towards “forceful rejection.”
In response, SEC Chairman Gary Gensler maintained his cautious stance during a media briefing yesterday (24) when asked about his views on the Ethereum ETF. He stated that two weeks ago (on the 12th), during an interview with CNBC, Gensler emphasized that the SEC’s decision to approve the Bitcoin spot ETF was based on Bitcoin being a “non-security commodity token,” which places it in the same category as other commodities such as gold and silver, for which we have previously approved spot ETFs.
Although the SEC has already approved Ethereum futures ETFs, which indirectly recognize ETH as a commodity rather than a security, the SEC has not yet reached a clear conclusion on this matter. This ambiguity could be used as a reason for rejecting the approval of Ethereum spot ETFs.
Currently, there are a total of 7 Ethereum spot ETF applications awaiting SEC approval, including applications from BlackRock, Fidelity, Grayscale, VanEck, Ark/21Shares, Invesco/Galaxy, and Hashdex. The latest news indicates that the SEC has extended the review period for BlackRock’s application by an additional 45 days until March 10th. Previously, the SEC also delayed Fidelity’s application until March 5th. Bloomberg analyst James Seyffart stated that the delay of Ethereum spot ETFs will continue to occur sporadically in the coming months, with May 23rd being an important date to watch.
However, this does not affect the optimistic voices in the market that expect the product to be approved within this year. Some views point out that the approval process for Ethereum spot ETFs will be similar to that of Bitcoin spot ETFs.
Matt Kunke, a research analyst at cryptocurrency market maker GSR, stated yesterday (24) that if the current Ethereum spot ETF applications are rejected in May, an appeal will be inevitable. In that case, he believes that the SEC will choose the path of least resistance to approve these products while maintaining a skeptical stance towards other cryptocurrencies.
SEC Commissioner Hester Peirce, dubbed the “Crypto Mom” by the community, holds a similar view. In an interview with Coinage last Tuesday, she cited last year’s successful ruling on Grayscale’s transformation of GBTC into a Bitcoin spot ETF, stating that an Ethereum spot ETF does not need to go through a court battle to gain approval.
On the other hand, given the SEC’s overall stance on cryptocurrency ETFs, some analysts remain skeptical about the quick launch of an Ethereum spot ETF.
Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, who was once optimistic about a Bitcoin spot ETF, stated:
Mark Yusko, the founder and CEO of Morgan Creek Capital, which was once bullish on a Bitcoin spot ETF, also shares the same view. In an interview with Cointelegraph on the 18th, he stated:
Mark Yusko explained that, as hinted by Gary Gensler, even if they approve the Bitcoin spot ETF application, the SEC still holds biases against cryptocurrencies. He also pointed out that the SEC currently only considers Bitcoin as a “commodity” with value storage capabilities, while Ethereum may be seen as a security, which is the main obstacle to the approval of an Ethereum ETF.
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