SEC Seeks Feedback on Proposed Ethereum ETFs Amid Diminished Optimism

The United States Securities and Exchange Commission (SEC) has initiated a public comment period on three proposed Ethereum exchange-traded funds (ETFs) from prominent asset managers Fidelity, Grayscale, and Bitwise. This move comes as anticipation builds regarding the commission’s decision on spot Ether ETFs, expected in May, including a forthcoming filing from VanEck.

The SEC’s call for comments, standard procedure for ETF filings, allows a 21-day window for public response upon publication in the Federal Register. These proposals aim to list and trade shares of spot Ether ETFs on various exchanges, with Bitwise and Grayscale targeting NYSE Arca and Fidelity eyeing the Cboe BZX Exchange.

Industry analysts have tempered optimism for SEC approval, with Bloomberg ETF analysts noting that the silence from the SEC is concerning, suggesting that nothing substantial has changed in the filings. Eric Balchunas, another Bloomberg ETF analyst, has revised his estimate of the likelihood of spot Ethereum ETF approval by May from about 70 percent to 30 percent.

The SEC’s recent approval of spot Bitcoin ETFs in January, after years of denials, had initially raised hopes for similar approvals for Ethereum ETFs. However, SEC Chair Gary Gensler has emphasized that the approval of Bitcoin ETFs does not imply a stance on other crypto assets’ regulatory status. The delay in approving Ethereum ETFs may indicate ongoing scrutiny, with the SEC reportedly investigating whether Ether should be classified as a security.

Despite hopes for SEC approval by the May deadline, analysts suggest that a delay between Bitcoin and Ethereum ETF approvals could be advantageous. While Bitcoin’s ETFs have seen significant inflows and popularity, Ethereum’s price currently hovers below its 2021 all-time high.

As the deadline for SEC decisions on ETF applications approaches on May 23, the fate of Ethereum ETFs remains uncertain. Comments from industry experts and stakeholders during this public comment period will likely play a crucial role in shaping the SEC’s final decision. Investors and enthusiasts keen on the mainstream adoption of Ethereum will closely monitor developments in the regulatory landscape, anticipating the potential impact on the cryptocurrency market and broader financial ecosystem.