SEC Likely to Block Introduction of Spot Ethereum ETFs, Disappointing Bulls
Ethereum Bulls Face Disappointment as SEC Likely to Block Spot ETH ETFs
Reports have emerged suggesting that the U.S. Securities and Exchange Commission (SEC) is poised to block the introduction of spot ether exchange-traded funds (ETFs) as early as next month, leaving Ethereum (ETH) bulls in a state of uncertainty.
Discouraging Interactions With the SEC
According to sources familiar with recent meetings between potential ETF issuers and the SEC, the agency is likely to deny spot Ethereum ETFs during their final review in May. Unlike the discussions leading to the approval of spot Bitcoin ETFs earlier this year, recent talks have been one-sided, with SEC staff reportedly not engaging in substantive details about the Ethereum ETF applications.
Despite arguments from ETF applicants that the approval of spot BTC ETFs and Ethereum futures-based ETFs set a precedent, the lack of detailed discussions with issuers suggests impending denials. VanEck, ARK Investment Management, BlackRock, Fidelity, and other issuers have filed paperwork to launch ETFs tracking the price of ETH, with regulatory deadlines set for May.
JPMorgan analysts have suggested that if the SEC rejects the spot ETH proposals, ETF issuers could potentially sue the regulator, leading to potential approval through court intervention, similar to the path taken by spot Bitcoin ETFs.
Setback For Ethereum
The potential rejection of spot ETH ETFs by the SEC poses a setback for Ethereum and its market, as hopes were high for wider acceptance of crypto-based investment products following the approval of spot BTC ETFs. Additionally, reports indicate that the SEC is considering designating Ethereum as a security, adding to the regulatory challenges facing the cryptocurrency.
Implications For Ether Price
Despite a 33% increase in value this year, Ethereum has struggled to keep up with Bitcoin’s 47% growth and recent all-time highs, reflecting market sentiment surrounding regulatory uncertainties. The uncertainty surrounding spot ETH ETF approvals is expected to exert bearish pressure on the price of ether, according to industry experts.
At the time of writing, the ether price was hovering around $3,130, up 1.5% on the day, according to CoinGecko data.
