SEC Blockage: Ethereum ETFs on hold, impatient investors

The SEC has delayed its decision regarding a major Ethereum ETF filed by Invesco and Galaxy Digital in September. For James Seyffart from Bloomberg, the critical date is now May 23rd for VanEck.

The SEC Delays Its Decision on Ethereum ETFs, While Bitcoin ETFs Create a Fury

In January, the Securities and Exchange Commission (SEC) gave the green light to 10 Bitcoin ETFs, causing a buzz in the financial markets. These funds are now actively traded and have attracted massive inflows.

SEC just delayed @InvescoUS & @galaxyhq's #Ethereum ETF. 100% expected and more delays will continue to happen in coming months.

The only date that matters for spot #ethereum ETFs at this time is May 23rd. Which is @vaneck_us's final deadline date pic.twitter.com/gkVZL2QuPK

— James Seyffart (@JSeyff) February 6, 2024

However, another event is garnering attention: the SEC’s delay of its decision on a highly anticipated Ethereum Spot ETF. Tuesday’s filing, unveiled by Decrypt, shows that the SEC has postponed its decision on the product proposed by Invesco and Galaxy Digital, initially filed last September.

If approved, this spot ETF would allow investors to gain exposure to ETH, the second-largest cryptocurrency, without having to purchase and store the asset themselves.

Analysts, such as those from Standard Chartered Bank and Bloomberg, now predict that an ETH ETF could be approved by May. The bank highlights that the SEC has not yet classified ETH as a security, which increases the chances of approval for such investment vehicles.

However, the SEC has also intensified its measures against cryptocurrency companies selling unregulated securities, underlining the growing regulatory stakes in the sector.

A Green Light That Is Being Delayed

The United States Securities and Exchange Commission, being a pro at procrastination, frequently delays its decisions regarding spot ETFs, including applications from giants like BlackRock and Fidelity.

According to information from The Block, no decision is expected before March regarding Ethereum ETFs. March 10th could become a critical date where the SEC will have to decide on approval requests from BlackRock, ARK 21 Shares, VanEck, and Fidelity.

Predictions vary: James Seyffart from Bloomberg talks about a possible validation in May, while TD Cowen foresees approval not before 2025. This cautious stance is motivated by political considerations, with Gary Gensler at the head of the SEC looking to avoid internal confrontations on cryptocurrency.

In the event of an initial rejection of the Ethereum ETFs, the process could extend to 2026, involving new filings, reviews, and potential legal challenges.