Spot Ethereum ETF Approval in Doubt Amid Growing Skepticism
As the US Securities and Exchange Commission (SEC) comes closer to deciding on spot Ethereum exchange-traded funds (ETFs), doubts are rising within the crypto industry. Experts are expressing concerns about the intricate relationships between Ethereum (ETH) futures and spot markets, as well as potential security issues that could hinder the approval of these ETFs.
SEC Roadblocks for Spot Ethereum ETFs Approval
The President of the ETF Store, Nate Geraci, emphasized the importance of SEC approval for both a 19b-4 change in trading rules and an S-1 registration statement before launching any ETF. However, there may be delays, particularly in S-1 approvals, even if 19b-4s are granted approval.
- James Seyffart, an ETF analyst at Bloomberg Intelligence, has expressed doubts about the approval of spot Ethereum ETFs.
- He pointed out weak correlations between futures and spot markets observed in 2021.
Proof-of-Stake Mechanism and Staking Complexities
Security classification concerns present another significant obstacle. Scott Johnson, a general partner at Van Buren Capital, noted that the SEC is contemplating treating Ethereum as a security in the upcoming spot ETF order. The current law mandates the SEC to provide notice of the grounds for disapproval under consideration.
- David Han, an institutional research analyst at Coinbase, highlighted the complexity introduced by differences between Bitcoin’s proof-of-work (PoW) and Ethereum’s proof-of-stake (PoS) mechanisms.
- He mentioned that the regulatory environment for asset staking remains unclear, especially for spot Ethereum ETFs that allow staking.
Challenges Ahead for Spot Ethereum ETFs Approval
Amid these complexities and uncertainties, it is becoming increasingly apparent that the road to approving spot Ethereum ETFs is filled with obstacles. The SEC’s upcoming deadlines to respond to spot Ethereum ETF applications from VanEck and ARK Invest are closely watched by the crypto community. The decisions made by the SEC will have a significant impact on the future of Ethereum ETFs and their introduction to the market.
Hot Take: Will the SEC Overcome the Hurdles for Spot Ethereum ETFs?
With skepticism growing and various roadblocks hindering the approval of spot Ethereum ETFs, the crypto community awaits the SEC’s decisions with bated breath. The complex links between Ethereum futures and spot markets, alongside potential security issues, pose significant challenges that must be addressed for regulatory approval. Only time will tell if the SEC can overcome these hurdles and pave the way for spot Ethereum ETFs to enter the market.
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