In the last 24 hours, Ethereum (ETH) has seen a notable decrease in price, dropping by 5%. This decline is believed to be linked to the looming rejection of Ethereum ETFs by the US Securities and Exchange Commission (SEC) scheduled for May. The rejection of these highly anticipated ETFs is likely to have a significant impact on the cryptocurrency market.
Meetings between the applicants for Ethereum ETFs and the SEC have reportedly been discouraging. The agency has not engaged in substantive discussions about the proposed products, a stark contrast to the detailed conversations that took place before the approval of spot Bitcoin ETFs earlier this year. This lack of dialogue has raised concerns among industry insiders, indicating that the SEC may be leaning towards rejecting the ETF applications.
Setback for Cryptocurrency Industry
If the SEC does reject the ETF applications, it will be a setback for the cryptocurrency industry. Many had hoped that the approval of spot Bitcoin ETFs would pave the way for similar products linked to other cryptocurrencies like Ethereum. However, the uncertainty surrounding the regulatory landscape following the expected rejections has left both issuers and investors in a state of flux.
Several applicants, including VanEck and ARK Investment Management, expect their ETF applications to be denied. Reasons for potential rejections include concerns about the depth of statistical data on the underlying ETH market. The rejection of Ethereum ETFs could also lead to legal battles, with some industry insiders suggesting that the courts may need to get involved before ETFs are eventually approved. This uncertainty has already had an impact on Ethereum’s price, leading to downward pressure in the market.
At the time of writing, Ethereum is trading at $3,100, reflecting a continued downtrend in the cryptocurrency’s price. Over the past fourteen and thirty days, ETH has experienced significant declines of 12% and 14%, respectively. The rejection of ETF applications may further exacerbate this trend, causing more uncertainty and volatility in the market.
The looming rejection of Ethereum ETFs by the SEC has cast a shadow of uncertainty over the cryptocurrency market. Issuers and investors alike are bracing for a potential denial of the applications, which could have far-reaching implications for the industry as a whole. As the regulatory landscape continues to evolve, it remains to be seen how the market will react to these developments.
