Key Points
According to a report by CNBC, issuers of spot Bitcoin exchange-traded funds (ETFs) are doubtful that the US Securities and Exchange Commission (SEC) will approve similar spot Ethereum ETFs.
Asset managers such as BlackRock, Fidelity, and VanEck are among those who are eagerly waiting for the SEC’s approval for Ethereum ETF products.
However, there is a level of uncertainty regarding the SEC’s decision.
SEC’s Stance on Crypto Assets
The report highlights that the SEC Chairman, Gary Gensler’s focus on crypto assets that fall under federal securities laws has added complexity to the approval process of an Ethereum ETF.
Gensler has stated that the majority of crypto assets are investment contracts, aligning with the SEC’s viewpoint.
VanEck’s CEO, Jan Van Eck, expects their Ethereum ETF application to be rejected.
He notes that the SEC has been providing feedback on the application for several weeks.
Jan Van Eck suggests that the SEC’s decision-making process is akin to that of Bitcoin ETFs, where extended reviews eventually lead to approval.
However, he acknowledges that the future for Ethereum ETFs remains uncertain.
He stated, “We were the first to file as well for Ethereum in the U.S., and we and [Ark Invest CEO] Cathy Wood, are kind of the first in line for May, I guess, to probably be rejected.”
CoinShares CEO Jean-Marie Mognetti also expresses a similar pessimistic view, stating he doesn’t expect any approvals soon, particularly for proof of stake protocols specific to Ethereum.
The SEC’s acceptance of proof of work (PoW), the protocol underlying Bitcoin, hasn’t raised securities law concerns as Bitcoin has been classified as a commodity by US regulators led by Gensler.
However, Ethereum’s proof of stake (PoS) protocol presents a challenge to the approval of Ethereum ETFs.
This protocol, unlike Bitcoin’s, relies on participants staking their existing tokens to secure the network.
The SEC’s concerns about this protocol pose an additional hurdle to the approval of Ethereum ETFs.
CoinShare’s CEO further emphasized, “I don’t see anything getting approved this side of the year.”
Market participants are keenly waiting for the SEC’s decision on the approval or disapproval of Ethereum ETFs.
Meanwhile, issuers of spot Bitcoin ETFs are preparing for the outcome and navigating the regulatory landscape to offer investment products tied to Ethereum.
It’s important to mention that the SEC has a May deadline to complete its review of Ethereum ETF applications after already delaying its original March decision deadline.
The price of ETH is currently at $3,518, reflecting a 2.5% decrease within the last 24 hours.
This decline continues the downward trend seen over the past 30 days, resulting in a nearly 10% drop.
