SEC Delays Decision on Ethereum ETF
The United States Securities and Exchange Commission (SEC) has once again postponed its decision on whether to approve a joint spot Ethereum exchange-traded fund (ETF) proposed by Invesco and Galaxy Digital. This is the second delay following a similar postponement in December. The SEC’s recent trend of pushing back deadlines for Ethereum ETF proposals continues.
SEC Institutes Proceedings
In a filing, the SEC indicated that it was “instituting proceedings,” which delays the decision-making process on the proposed ETF. The agency has also extended deadlines for other spot Ethereum ETF proposals, including one from Grayscale Investments. The SEC raised questions regarding Ethereum’s proof-of-stake mechanism and the potential for concentration of control or influence by a few entities.
Extended Review Period
The SEC can extend the review period for the Invesco-Galaxy spot Ethereum ETF for up to 240 days before reaching a final decision. Invesco filed the proposal with the commission in October 2023, and it was published in November, setting the deadline for the SEC’s decision to July 2024. Stakeholders have a limited time to submit their comments on the proposal.
Uncertainty Among Market Analysts
The delay in approving spot Ethereum ETFs has left market analysts uncertain about when such investment vehicles might gain approval. While some analysts suggest that approval could come as soon as May 23, others anticipate further delays in the coming months. The critical date for spot Ethereum ETFs remains May 23, which is VanEck’s final deadline for approval.
No Broader Endorsement of Cryptocurrency ETFs
The recent approval of several spot Bitcoin ETFs by the SEC led to speculation about a similar approach toward Ethereum-based investment vehicles. However, SEC Chair Gary Gensler clarified that the decision was specific to Bitcoin and should not be seen as a broader endorsement of cryptocurrency ETFs.
Hot Take: SEC Delays Decision on Invesco-Galaxy Ethereum ETF
The SEC has once again delayed its decision on whether to approve the joint spot Ethereum ETF proposed by Invesco and Galaxy Digital. This delay aligns with the SEC’s trend of pushing back deadlines for Ethereum ETF proposals. The agency’s decision to institute proceedings raises concerns about legal and policy issues surrounding the proposed rule change. Market analysts remain uncertain about when spot Ethereum ETFs might gain approval, with some expecting further delays. While the SEC recently approved spot Bitcoin ETFs, it does not indicate a broader endorsement of cryptocurrency ETFs. The critical date for spot Ethereum ETFs is May 23, VanEck’s final deadline for approval.
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