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Despite the recent success of the spot Bitcoin (BTC-USD) ETF, the cryptocurrency industry does not expect the SEC to approve a similar Ethereum (ETH-USD) product at this time.
The securities regulator will announce its decision at least A little ether (ETH-USD) ETF application this week. Markus Thielen, founder of cryptocurrency analytics firm 10x Research, said: “The betting market expects only a 7% chance of approval by the end of this month.” The ETF issuer also said that the U.S. Securities and Exchange Commission Limited communication and feedback on applications.”
Fund managers that have applied for spot Ethereum ETFs include VanEck, BlackRock (BLK), Fidelity and ARK Invest. “We and Cathy Wood (ARK CEO) are probably the first to be rejected,” VanEck CEO Jan van Eck told CNBC last month. The SEC has until May 23 to make a decision on VanEck’s application.
One wild card is Ethereum’s staking feature, which SEC Chairman Gary Gensler has previously said could lead to Ethereum (ETH-USD) being considered a security and falling under the regulatory authority jurisdiction. It’s unclear whether the SEC’s ETF decision will provide more clarity on this.
Regardless, the SEC’s rejection could lead to litigation. Grayscale Investments’ legal victory last August paved the way for the approval of a spot Bitcoin (BTC-USD) ETF.
Coinbase (COIN) recently suggested that the market may be underestimating the likelihood of the SEC approving a spot Ethereum (ETH-USD) ETF. “Even if the first deadline of May 23 is denied, we believe there is a good chance that litigation will overturn that decision.”
