The SEC’s Denial of Spot Ether ETFs in the US More Likely Than Expected, Says Variant Fund Chief Legal Officer
According to Variant Fund Chief Legal Officer Jake Chervinsky, the Security and Exchange Commission (SEC) is more likely to deny spot ether exchange-traded funds (ETFs) in the United States by the May deadline than people think. Chervinsky explains that while he is not certain about the denial, he believes that the legal issues and policy environment in Washington, DC make it more likely. This has raised concerns among those in the crypto community who were hopeful for spot ether ETF approvals.
SEC Chair Gary Gensler’s Stance on Spot Bitcoin ETFs and Uncertainties Surrounding Spot Ether ETF Approvals
With the successful launch of spot bitcoin ETFs in January, attention has turned to the possibility of spot ether ETF approvals. However, SEC Chair Gary Gensler has clarified that the agency’s approval of spot bitcoin ETFs should not be interpreted as a green light for other cryptocurrencies. This has created uncertainties around spot ether ETF approvals, as Gensler views cryptocurrencies other than bitcoin as securities.
- Big-name firms like BlackRock, Fidelity, and Franklin Templeton have applied for spot ether ETFs.
- Many in the crypto community believe that BlackRock’s track record of only one ETF denial is a positive indicator for spot ether ETF approval.
- Chervinsky disagrees with this view and considers it a “lazy bull take.”
Varying Opinions on Spot Ether ETF Approval and Significance
Bloomberg ETF analyst Eric Balchunas initially suggested a 70% possibility of spot ether ETF approval by May 23. However, in response to Chervinsky’s remarks, Balchunas and fellow ETF analyst James Seyffart are reevaluating their odds. Balchunas believes that spot ether ETFs are not as significant as spot bitcoin ETFs and compares them to an opening act following a headliner. On the other hand, The ETF Store President Nate Geraci predicts that spot ether ETFs will have a bigger impact than expected, citing ether’s market cap being one-third of bitcoin’s.
- Balchunas believes that spot ether ETFs are not as popular or in demand as spot bitcoin ETFs.
- Sassano disagrees with Balchunas’ comparison and suggests comparing Grayscale’s GBTC and ETHE products instead.
- Kling argues that expectations are more concentrated around August than May, coinciding with BlackRock’s deadline.
August Approval Unlikely, Potential Legal Actions by Grayscale
Chervinsky agrees with Kling that August is not more likely than May for spot ether ETF approvals. He does not see any significant changes in law, policy, or politics that would favor an August approval. Some speculate that Grayscale may sue the SEC if its application for a spot ether ETF is denied, similar to the conversion of its GBTC fund into a spot bitcoin ETF. However, Chervinsky points out that this SEC has shown little fear of losing in court and Chair Gensler’s approach is to be aggressive.
Hot Take: The SEC’s Denial of Spot Ether ETFs More Likely Than Expected
The denial of spot ether exchange-traded funds (ETFs) by the Security and Exchange Commission (SEC) in the United States by the May deadline is more likely than people think, according to Variant Fund Chief Legal Officer Jake Chervinsky. Despite not being certain about the denial, Chervinsky believes that the legal issues and policy environment in Washington, DC make it more likely. This has raised concerns among those in the crypto community who were hopeful for spot ether ETF approvals.
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