The Challenge of Getting SEC Approval for Ethereum ETFs

The Challenge of Getting SEC Approval for Ethereum ETFs

The recent approval of spot Bitcoin ETFs in mid-January has seen the crypto markets experience a significant surge, with total capitalization increasing by a trillion dollars and Bitcoin hitting a new all-time high. However, the same level of success has not been seen for Ethereum, with the digital currency struggling to overcome the $4,000 mark. The optimism surrounding the approval of spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) by May 23rd seems to be fading, according to reports.

Fox Business correspondent Eleanor Terrett has reported that conversations with individuals familiar with the SEC’s processes have revealed a lack of engagement from the Commission towards Ethereum ETF applications. Meetings have been described as one-sided, and there is a belief that SEC Chairman Gary Gensler may already feel that the approval of Bitcoin ETFs was sufficient for the industry. Anti-crypto politicians like Elizabeth Warren are also opposing the approval of Ethereum ETFs, further complicating the situation.

ETF Store President Nate Geraci has highlighted the SEC’s argument that Ethereum futures do not closely correlate with spot markets, which could potentially impact the approval of spot Ethereum ETFs. He believes that denying approval based on this lack of correlation would not reflect well on the SEC. Geraci also mentioned the Grayscale court victory as a potential factor that could influence the SEC’s decision, with the option being to either reverse their previous acceptance of Ethereum as a commodity or face potential lawsuits from issuers.

Bloomberg ETF analyst Eric Balchunas shared his perspective on the situation, suggesting that SEC Chairman Gary Gensler’s position on Bitcoin may influence his stance on Ethereum. This indicates that the approval process for Ethereum ETFs may not be solely based on its individual merits but could be influenced by broader regulatory concerns and political pressures.

The road to obtaining SEC approval for Ethereum ETFs appears to be fraught with challenges, stemming from regulatory uncertainties, political opposition, and concerns about market correlations. While industry experts and insiders are hopeful for a positive outcome, the dynamics at play indicate a complex and potentially protracted approval process for spot Ethereum ETFs. Only time will tell how this situation unfolds and whether Ethereum will eventually receive the regulatory green light for ETFs.


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