Will the SEC Approve a Spot Ethereum ETF?
Bloomberg exchange-traded funds (ETFs) analyst Eric Balchunas believes the odds of the U.S. Securities and Exchange Commission (SEC) approving a spot Ethereum (ETH) ETF by late May are low.
Why a Spot Ethereum ETF Approval is Unlikely
Balchunas expressed his pessimism on the approval of an ETH spot ETF in a recent social media post. During an interview on the David Lin YouTube channel, he mentioned a few key reasons for his skepticism:
- The approval process is behind schedule:
- As of now, the deadline for approval is May 21st.
- The SEC has not provided any feedback to the issuers yet.
- Typically, the SEC would ask questions and request revisions, which could take weeks or even months.
- SEC Chair Gary Gensler’s stance:
- Gensler may view Ether as a security rather than a commodity.
- Approving an ETH ETF could contradict his beliefs about the nature of Ether.
The Political Landscape
Balchunas also noted that the SEC may not feel pressured to approve a spot Ethereum ETF, contrasting with the environment surrounding the approval of a Bitcoin ETF:
- Bitcoin’s approval followed a lawsuit that Grayscale won against the SEC.
- The court ruled that the SEC’s failure to approve a Grayscale Bitcoin product was unlawful.
- Bitcoin had favorable circumstances, including political support and legal backing, that may not apply to Ethereum.
Challenges of SEC Approval
Given the legal and political landscape, it’s uncertain whether the SEC will approve a spot Ethereum ETF in the near future. Balchunas’ insights suggest that several obstacles stand in the way of this approval.
Hot Take
The chances of the SEC approving a spot Ethereum ETF by late May seem slim, according to Bloomberg analyst Eric Balchunas. Legal complexities, political considerations, and regulatory delays could hinder the process in the coming weeks. Crypto investors should monitor these developments closely to understand the evolving dynamics of the market.
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