News - SEC delays decision on spot ETFs for Ethereum

By Luc Vesters

SEC delays decision on spot ETFs for Ethereum

Ethereum (ETH)
ETF

Analysts expect a decision on the Ethereum ETF, although this seems less likely than Bitcoin. There is a lot of interest in an Ethereum spot ETF, but the U.S. Securities and Exchange Commission (SEC) postponed its decision on the matter on Jan. 25, According to Coindesk. The SEC first wants public feedback on the structure of Ethereum ETFs, similar to that of Bitcoin ETFs.

This delay affects applications from BlackRock and Grayscale, among others. The SEC must decide on BlackRock's application by Aug. 7, 2024, while other deadlines range between May 23 and Aug. 3.

Bloomberg analyst Eric Balchunas thinks the decision is likely in May 2024, with an estimated 70% approval rating. However, Mark W. Yusko, CEO of Morgan Creek, is less optimistic and estimates the probability to be less than 50%. He points to the SEC's continued hostile attitude toward the crypto industry, as evidenced by statements made by SEC Chairman Gary Gensler.

In approving Bitcoin spot ETFs, Gensler emphasized that this did not mean approval of Bitcoin itself. On Jan. 11, 2024, after months of negotiations, the SEC approved Bitcoin spot ETFs, a historic moment. Since then, however, Bitcoin's value has fallen about 20%, mostly due to a sell-off by Grayscale, owner of the largest Bitcoin fund.

Following the approval of the Bitcoin spot ETF Ethereum rose by more than 10%, partly due to prediction of its own ETF. Certain altcoins on the Ethereum network actually rose by up to 30%.

Another interesting point is What would happen if the world's largest asset managers invested 1% of their portfolio in an Ethereum spot ETF.

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