The Securities and Exchange Commission (SEC), the American regulatory body, has once again delayed its decision regarding requests for Ethereum-based Spot ETFs, this time from asset management firms Hashdex and ARK 21Shares. According to recent documents, the regulatory body is taking more time to carefully consider the potential impact and regulatory concerns associated with investment funds based on Ethereum, the second-largest cryptocurrency by market capitalization.
The SEC has set a new deadline for its verdict: May 30, 2024. However, analysts at Bloomberg Intelligence ETF, James Seyffart and Eric Balchunas, have expressed skepticism about the approvals, anticipating a potential rejection. Balchunas stated that the likelihood of ETF approval by the May deadline has dropped to 35%, citing a lack of bullish signals compared to previous approvals for Bitcoin ETFs.
Seyffart also changed his cautiously optimistic stance on Ethereum ETFs, now believing they will ultimately be rejected. Analysts interpret the SEC's change in attitude as a clear signal of possible rejection, especially considering the limited interactions between the regulatory body and ETF applicants for Ethereum compared to those for Bitcoin.
Moreover, Seyffart shared on social media that the SEC may delay its decision on other applications as well, suggesting potential delays for VanEck, ARK/21Shares, Hashdex, and Grayscale within the next 12 days.
Despite pressure from crypto industry stakeholders to expedite the process, SEC staff members have shown limited interest, while some politicians remain opposed to crypto assets, including Senator Elizabeth Warren. The SEC's current approach to Ethereum ETFs contrasts with its handling of Bitcoin ETF applications, and anti-crypto politicians are now also rallying against Ethereum ETFs.
Meanwhile, SEC Chairman Gary Gensler has remained silent on Ethereum ETFs. When asked about the possibility and timing of an ETF approval for ETH, Gensler stated that the process will follow a similar approach to Bitcoin ETFs but refrained from providing specific details or a potential timeline.
The delay in decision-making is not unique to Hashdex and ARK 21Shares; the SEC also postponed its decision on an ETF application from Invesco and Galaxy Digital on February 6. Additionally, the SEC has deferred decisions on requests from other major companies, including Grayscale, Fidelity, and BlackRock.
Meanwhile, institutions based in Hong Kong are actively preparing to launch spot ETFs on Ethereum, seeking to gain an advantage over the United States.