SEC Postpones Ethereum ETF Decision Amidst Uncertainty

Enthusiasts of Ethereum (ETH) have been closely monitoring recent developments as a critical deadline approaches. Initially scheduled for a decision in March, the Securities and Exchange Commission (SEC) announced on Tuesday, March 19th, that the final deadline would be extended to late May. Specifically, the SEC has designated May 24th and May 30th as the final decision dates for ARK 21Shares and Hashdex, respectively.

Explaining the rationale behind the extension, the SEC stated, “The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

In response to the SEC’s announcement, Ethereum’s price experienced a notable 8% decline, highlighting the market’s sensitivity to regulatory decisions. Currently, Ethereum is trading around $3,100, reflecting the uncertainty surrounding the approval of its ETFs.

This postponement impacts several proposals for Ethereum ETFs, including submissions from industry giants like BlackRock, Grayscale, and Fidelity. Recent sentiment has shifted, with analysts expressing skepticism about the likelihood of approval.

ETF analyst James Seyffart noted a concerning lack of engagement between the SEC and Ethereum ETF issuers, leading to a more pessimistic outlook. Seyffart stated, “My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied on May 23 for this round.”

Moreover, market predictions indicate a significant decline in confidence regarding approval. According to Polymarket, the likelihood of an Ethereum ETF approval in May has dropped to 24%, contrasting sharply with the 75% odds following the SEC’s approval of spot Bitcoin ETFs in January.

Amidst these developments, Coinbase has emerged as a vocal advocate for Ethereum ETFs. Last month, Paul Grewal, Coinbase’s chief legal officer, published a detailed letter outlining the rationale for approving an Ethereum ETF.

Grewal emphasized Ethereum’s classification as a commodity, supported by the Commodity Futures Trading Commission (CFTC) and various SEC and court decisions. This argument forms part of a broader effort to demonstrate Ethereum’s market stability and viability as an ETF.

Image Credit: Shutterstock

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SEC Postpones Ethereum ETF Decision Amidst Uncertainty

was first posted on March 20, 2024 at 3:07 pm.
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