SEC Postpones Decision on Ethereum-based ETFs; Deliberations Extended to May 2024

The United States Securities and Exchange Commission (SEC) has announced a delay in its decision-making process regarding several Ethereum-based exchange-traded funds (ETFs) until May 2024. This regulatory filing, made on December 18, affects ETF proposals such as the Hashdex Nasdaq Ethereum ETF, the Grayscale Ethereum Futures ETF, the VanEck spot Ethereum ETF, and a spot Ethereum ETF jointly proposed by Cathie Wood’s ARK Invest and 21Shares.

Of note is the unique approach of the Hashdex Ether ETF, which aims to incorporate both spot Ether and futures contracts. Additionally, the Grayscale Ethereum Futures ETF is seen as a strategic move to potentially convert the existing Ethereum Trust into a spot Ethereum ETF, gaining significant attention within the industry.

The SEC has stated its intention to initiate proceedings to gather more public input on these ETF listings, emphasizing its commitment to meticulous examination and public engagement before reaching a final decision. Bloomberg ETF analyst James Seyffart anticipates these delays and expects final decisions to be made by late May.

While the SEC has previously approved Ethereum futures-based ETFs, the approval of spot Ether or mixed fund ETFs has yet to be granted. Notably, in October, the SEC simultaneously approved nine futures-based ETF products, signaling a significant development in the industry.

The crypto sector is anxiously monitoring the SEC’s decisions regarding 13 spot Bitcoin (BTC) ETFs currently under review. Analysts Seyffart and Eric Balchunas from Bloomberg suggest that a decision on these Bitcoin ETFs could be reached as early as January 10, 2024. The analysts estimate a 90% likelihood of approval for a spot Bitcoin ETF, fueling optimism, particularly concerning institutional access to Bitcoin.

Over the past six months, Bitcoin has seen a price increase of over 44%, while Ether (ETH) has also experienced a notable rise of 16.8% during the same period, according to CoinMarketCap data.

Investors and industry experts have expressed concerns that delays in approving Ethereum ETFs are impeding market development and limiting investors’ access to diversified investment opportunities. However, the SEC maintains its stance on conducting thorough evaluations to prevent fraudulent activities and safeguard investor interests.

As the crypto community awaits the SEC’s final decisions, active public participation through commenting on proposed rule changes for Ethereum ETFs is encouraged. This engagement is considered a crucial part of the regulatory process, shaping the future landscape of cryptocurrency investments in the US market.