After the U.S. Bitcoin Spot ETF was passed this month, the market is looking forward to the Ethereum Spot ETF also being passed this year. Bloomberg ETF analyst Eric Balchunas believed at the beginning of the month that the SEC had a 70% chance of approval in May; however, yesterday Fox Business reporter Eleanor Terrett reported , citing people familiar with the matter, that the SEC's current position is to favor "forceful rejection."
In this regard, SEC Chairman Gary Gensler maintained his usual cautious attitude. When asked about his views on the Ethereum ETF at a media briefing yesterday (24th), he said :
As I said two weeks ago, everything we do with the Bitcoin ETF is limited to this "non-security commodity" and should not be interpreted as referring to any other cryptocurrency beyond that.
Two weeks ago (12th), Gensler also emphasized in an interview with CNBC that the SEC’s decision to pass the Bitcoin spot ETF was based on the fact that Bitcoin is a “non-security commodity token”, which makes it similar to other commodities such as gold and silver. Likewise, we have approved spot ETFs for gold and silver in the past.
Although the SEC has approved an Ethereum futures ETF, subtly acknowledging that ETH is a commodity rather than a security, the SEC has not yet made a clear conclusion on this, which may be used as a reason to refuse to approve an Ethereum spot ETF.
SEC Delays BlackRock Ethereum Spot ETF
There are currently seven Ethereum spot ETF applications waiting for SEC approval. Applicants include BlackRock, Fidelity, Grayscale, VanEck, Ark/21Shares, Invesco/Galaxy and Hashdex.
The latest news points out that the SEC yesterday (24th) extended the review period for BlackRock's application by another 45 days to March 10. Recently, the SEC also postponed Fidelity's application to March 5. Bloomberg analyst James Seyffart It said that Ethereum spot ETF postponements will continue to occur sporadically in the coming months, with the important date of concern being May 23.
Optimistic view on Ethereum spot ETF
However, this still does not affect the optimism in the market that the product will be approved within the year. Some people point out that it will be similar to the approval method of the Bitcoin spot ETF.
Matt Kunke, a research analyst at cryptocurrency market maker GSR , said yesterday (24th):
We expect the Ethereum spot ETF to be approved in May, estimating the probability at 75%. This optimistic outlook is based on Grayscale’s victory in the appeals court and the subsequent approval of the Ethereum futures ETF, which all indicate that the approval of the Ethereum spot ETF is only a matter of time.
Kunke added that if the SEC rejects the current Ethereum spot ETF application in May, appeals will be inevitable. If that happens, he believes the SEC will take the path of least resistance in approving these products while maintaining a skeptical stance toward other cryptocurrencies.
SEC Commissioner Hester Peirce, who has been dubbed the "crypto mom" by the community, also holds the same view. In an interview with Coinage on Tuesday, she also cited last year's Grayscale ruling on GBTC's transformation into a Bitcoin spot ETF as an example, saying that the Ethereum spot ETF No court proceedings are required to obtain approval.
A bearish view on Ethereum spot ETFs
On the other hand, some analysts are skeptical that an Ethereum spot ETF will be launched anytime soon, given the SEC’s overall stance on crypto ETFs.
Anthony Scaramucci, founder and managing partner of SkyBridge Capital, said:
We are less optimistic about the likelihood of an Ethereum ETF being approved within this year. The SEC made it clear in its Bitcoin Spot ETF approval that it considers the vast majority of crypto-assets to be investment contracts subject to securities laws and therefore excludes them from the ETP structure of non-security commodities.
Mark Yusko, founder and CEO of Morgan Creek Capital, who was once optimistic about Bitcoin spot ETFs, also holds the same view. In an interview with Cointelegraph on the 18th, he said :
I would probably say that the chance of an Ethereum spot ETF being approved by the SEC for listing in 2024 is less than 50%.
Mark Yusko explained that, as Gary Gensler hinted, even if they passed the application for a Bitcoin spot ETF, the SEC still has a bias against cryptocurrencies. He also pointed out that the SEC currently only regards Bitcoin as a "commodity" with the ability to store value, while Ethereum may be regarded as a security, which has become a major obstacle to the failure of the Ethereum ETF to be approved.
