The SEC has postponed the Ethereum spot ETF applications from Fidelity, BlackRock, and Grayscale this week, which market analysts expected. The key date for these applications is mid-May.
After the approval of the Bitcoin spot ETF in the United States, there was widespread optimism that the Ethereum spot ETF would also be approved this year. However, the U.S. Securities and Exchange Commission (SEC) stated that it is still carefully considering the proposals. Following the postponement of applications from Fidelity and BlackRock, the SEC has once again delayed the application from Grayscale to convert its Ethereum Trust product (ETHE) into a spot ETF.
Questioning the vulnerability of the PoS mechanism to manipulation, the SEC issued an order yesterday, requesting the initiation of procedures and soliciting public opinions on the proposal. In addition, the SEC specifically inquired about the proof-of-stake mechanism of Ethereum in the document and raised concerns about whether the “control or influence concentration” of ETH by a few individuals or entities could lead to risks of fraud and manipulation. According to the SEC, the public comment period is 21 days, and the rebuttal period is 35 days.
The key date is May 23rd. In fact, before Grayscale, the SEC had also postponed decisions on Ethereum spot ETF proposals from BlackRock and Fidelity in the past week. Analysts currently have both optimistic and pessimistic views on whether the Ethereum spot ETF will be approved soon after the approval of the Bitcoin spot ETF this month.
However, Bloomberg ETF analyst James Seyffart stated that the SEC’s postponement of the Ethereum spot ETF is likely to occur irregularly in the next few months. The next key date is May 23rd. Whether ETH is considered a security is a crucial factor for the approval of the spot ETF. Currently, among all cryptocurrencies, only Bitcoin is considered by the SEC as a commodity with a value storage capability, while Ethereum may still be classified as a security, which is another major obstacle for the approval of the Ethereum ETF.
It is worth mentioning that when considering Gensler’s opaque position on whether to view Ethereum as a potential security, the fact is that the U.S. Commodity Futures Trading Commission (CFTC) is more inclined to regard ETH as a commodity. In addition, last year’s court ruling in favor of Ripple, stating that XRP is not a security in secondary market transactions, will make “Gensler taking a stance that most digital assets are securities” a difficult battle.
Related Reports:
– Survey: 52% Optimistic about the Approval of Ethereum Spot ETF by the end of 2024; TD Cowen, JPMorgan: Not Likely to Approve Soon
– Bloomberg Analyst: Ethereum Spot ETF Expected to Launch “This Year”! 70% Chance of SEC Approval in May
– It’s Ethereum’s Turn! Spot ETF Expected to be Approved for Listing this Year! Bloomberg Analyst: SEC Implicitly Recognizes ETH as a Commodity
– Gotcha! SEC Chairman Gary Gensler’s 2018 Assertion that Ethereum is Not a Security