On March 19, the US Securities and Exchange Commission delayed its decision on whether to approve spot Ethereum ETFs from Hashdex and Ark 21Shares.
Both products have now been postponed until a final SEC decision is made in late May. The Ark 21Shares deadline is May 24, and Hashdex will get its application approved or disapproved on May 30.
The first final deadline, however, is for the VanEck spot ETH ETF, which is on May 23. This will set the precedent for the rest of them.
Spot ETH ETFs Ultimately Denied?
Although these delays were expected, the latest batch of SEC postponements has diminished all hopes of approvals for spot Ethereum ETPs in May among industry experts.
On March 19, Bloomberg ETF analyst James Seffart said, “My cautiously optimistic attitude for ETH ETFs has changed from recent months,” before adding:
“We now believe these will ultimately be denied May 23rd for this round.”
He added that the SEC hasn’t engaged with issuers on Ethereum specifics, which is the exact opposite of the situation before the Bitcoin ETFs were approved.
ETF Store President Nate Geraci said it was not a good sign but added that the regulator “isn’t completely checked out” because it recently met with Coinbase and Grayscale attorneys on this topic.
Agree if SEC not engaging w/ issuers on spot eth ETF, that’s clearly not good sign…
I don’t know this as fact btw, assuming BBG does.
I will say that SEC isn’t completely checked out. They recently met w/ Coinbase & Grayscale attorneys on this topic. https://t.co/Wh6Q8AjZyc
— Nate Geraci (@NateGeraci) March 19, 2024
He added that it should also be noted that issuers are still amending filings. On March 18, Fidelity amended its filing to include ETH staking.
“I have yet to hear a logical explanation on *why* the SEC will disapprove,” he said before adding, “Unless I’m missing something, it’s either face lawsuits or approve.”
Bloomberg ETF analyst Eric Balchunas echoed the sentiment with the following quip on March 19:
“Until issuers say the SEC’s reached out, approval shall remain in serious doubt.”
Last week, Balchunas dropped his May approval odds to 35%, down from as high as 70% in January.
ETH Plunges Again
There are currently eight ETF issuers vying for approval, including BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, Ark 21Shares, and Franklin Templeton.
Earlier this week, CryptoPotato reported that Grayscale may have issues if its ETHE fund gets converted to a spot ETF. There is likely to be a large exodus from the fund, especially if staking is also approved due to superior yields elsewhere.
ETH prices had collapsed a further 7.7% on the day in a dump to $3,122, 23% down from its 2024 high last week.
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