10 months ago
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The SEC has decided to delay its decision on approving or disapproving the spot ETH ETF proposal from BlackRock until March.
The United States Securities and Exchange Commission has announced a delay on its decision on BlackRock’s application for a spot Ethereum (ETH) exchange-traded fund (ETF). In a filing, the Commission said it will make a decision in March.
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein,” wrote the SEC.
The filing, signed by Assistant Secretary Sherry R. Haywood, specifies March 10 as the new date the Commission will approve, disapprove, or “institute proceedings” to approve or disapprove.
Likelihood of SEC Approving BlackRock Spot ETH ETF after Delay
Last November, BlackRock submitted an S-1 filing to the SEC for its iShares Ethereum Trust. The giant asset manager filed for the ETF about six months after submitting an application for the iShares Bitcoin Trust, the company’s spot Bitcoin ETF. The price of Ethereum seemed to react positively to the news, rising 6.98% and crossing the $2,000 mark.
Despite the optimism around ETFs, especially considering that the SEC recently approved multiple spot Bitcoin ETFs, some skepticism surrounds the Ethereum version. According to Morgan Creek Capital’s Chief Executive Officer (CEO) Mark Yusko, the SEC is still generally hostile to cryptocurrencies.
In a recent interview with Cointelegraph, Yusko disagreed with Bloomberg ETF analyst Eric Balchunas, who believes there is a 70% chance the SEC will approve an Ether ETF by May. According to Balchunas, the Ether spot ETF “is tied to the hip of Bitcoin spot for sure. It’s gonna go wherever it goes. It’s basically like on a 15-foot rope following it.” Essentially, Balchunas does not think the SEC can approve spot Bitcoin ETFs but reject Ether spot.
SEC Might Consider ETH a Security
Yusko has a different opinion. The Morgan Creek Capital exec noted the SEC’s unsupportive stance towards cryptocurrencies, highlighted by Commission Chair Gary Gensler. In a publication following the approval, Gensler specified that the Commission’s assent to spot Bitcoin ETF trading does not “approve or endorse Bitcoin.” The Chair warned investors to “remain cautious about the myriad risks associated with Bitcoin” and related products. He added that the asset is primarily speculative and volatile and used for illegal activities, including sanction evasion, terrorist financing, money laundering, and ransomware.
According to Yusko, the SEC might consider Ether a security. This is a stark difference from the view on Bitcoin, which the Commission considers a commodity. If the SEC maintains the security view on Ether, the regulation and approval of spot ETH ETFs may not be straightforward. On the possibility of a spot Ether ETF, Yusko said:
“I’d probably say less than 50/50”
An X post from Fox Business News journalist Eleanor Terrett highlighted varying views on the possibility of an ETH ETF. Without specifying, Terret said one of the current spot Bitcoin ETF issuers is confident that the SEC will approve spot ETH ETFs because it approved the Bitcoin version. However, an unnamed source says that there is a “hard no” at the SEC due to “some internal resistance” to the idea.
