As expected by the market, the U.S. Securities and Exchange Commission (SEC) announced on Monday that it has postponed its decision on the applications for Ethereum spot ETFs from BlackRock and Fidelity. The market generally believes that May will be an important time period to determine whether Ethereum spot ETFs will be approved.
In the meantime, the SEC also announced on Monday that it has postponed its decision on Fidelity’s Ethereum spot ETF application and has solicited public opinions on whether to approve this ETF. The public can submit comments on these two ETFs within 21 days, and the rebuttal period is 35 days.
BlackRock and Fidelity both submitted their applications for Ethereum spot ETFs to the SEC in November last year. Subsequently, financial institutions such as Hashdex, ARK 21Shares, and VanEck also followed suit and submitted applications for Ethereum spot ETFs. Currently, there are a total of 8 applications for Ethereum spot ETFs. However, the SEC has recently been continuously postponing its decisions on applications from Grayscale, Invesco/Galaxy, and others.
James Seyffart, an analyst from Bloomberg, previously stated that he expects more applications to be postponed by the SEC in the coming months. Currently, the only important date for Ethereum spot ETFs is May 23rd, as this is the final deadline for VanEck’s application to be approved. Seyffart estimated in late January that there is a 60% chance of Ethereum spot ETFs being approved in May. However, he admitted that the SEC still has many ways to further delay the decision. If not approved in May, it may have to wait until 2025.
Opinions on whether Ethereum spot ETFs will be approved in May are divided. Jake Chervinsky, General Counsel of Variant, a risk fund, questioned the expectation that Ethereum spot ETFs will be listed before May 23rd, citing legal issues and the policy environment in Washington, which he believes increase the possibility of SEC rejection or withdrawal of applications. Scott Johnsson, a U.S. financial lawyer, recently analyzed the application process of Bitcoin spot ETFs and believed that the SEC may deviate from the approval timeline of Bitcoin spot ETFs but will still approve Ethereum spot ETFs. If Ethereum spot ETFs are not approved by May 2024, the latest approval may be in mid-2025.
SEC Chairman Gary Gensler previously emphasized that the decision to approve Bitcoin spot ETFs in January does not represent SEC’s endorsement of digital assets, nor does it necessarily mean that SEC will treat Ethereum in the same way as Bitcoin in the future. He reiterated that most cryptocurrencies are unregistered securities and the agency has a responsibility to protect investors from fraud and market manipulation.