Anticipated Rejection of Ethereum ETFs by SEC Sparks Concerns in Crypto Industry
Ethereum Price Drops 5% Amid Speculation of SEC Rejection of ETFs
In the past 24 hours, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has seen a significant 5% price drop. This decline comes as speculation grows that the highly anticipated Ethereum ETFs will likely be rejected by the US Securities and Exchange Commission (SEC) in the upcoming May deadline.
US Bitcoin ETF Issuers Anticipate SEC Denial
According to a recent Reuters report, various US Bitcoin ETF issuers and firms are bracing for the SEC’s expected denial of their applications to launch ETFs tied to the price of ETH.
Prominent investment firms such as VanEck, ARK Investment Management, and seven other issuers have submitted filings with the SEC to list ETFs tracking the spot price of Ethereum. VanEck’s and ARK’s applications are subject to the SEC’s decisions by May 23 and May 24, respectively.
Meetings between the applicants and the SEC have reportedly been discouraging, with agency staff not engaging in substantive details about the proposed products. This lack of dialogue contrasts the detailed discussions that took place before the SEC’s approval of spot Bitcoin ETFs in January.
Setback For Crypto Industry
If the ETF rejections occur, it would be a setback for the cryptocurrency industry, which had hoped for mainstream adoption through the approval of spot Bitcoin ETFs leading to similar products.
The uncertainty surrounding the regulatory landscape has left issuers unsure of the outcome, with some expressing intentions to continue discussions with the SEC through additional disclosure paperwork.
Potential Legal Battles
Industry insiders speculate that the rejection of Ethereum ETFs could lead to potential court battles, as applicants may challenge the SEC’s decision. The rejection has already impacted Ethereum’s price, with the cryptocurrency experiencing downward pressure as market participants anticipate a negative outcome.
Currently trading at $3,100, ETH has seen significant declines over the past fourteen and thirty days, highlighting the persistent downtrend of the token.
As the crypto community awaits the SEC’s decision, the rejection of Ethereum ETFs could have far-reaching implications for the industry.
