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The US SEC must decide on VanEck’s and ARK’s spot Ethereum ETF filings by May 23 and May 24 respectively.
As the deadline for the United States Securities and Exchange Commission (SEC) to issue a final ruling on the several applications for the spot Ethereum exchange-traded funds (ETFs) closes in, market experts believe the agency will reject their listing and trading. After approving the spot Bitcoin ETFs earlier this year, market pundits have critically analyzed the events that led to the imminent approval and issued this opinion.
Notably, the regulatory agency is expected to issue its final ruling mid-next month, which is a major announcement for the entire crypto industry. In case the agency approves all the spot Ether ETFs, experts believe it will pave the way for more altcoins to follow the same path.
US SEC on Spot Ethereum ETFs
While the political atmosphere is favorable, amid the upcoming elections, the U.S. SEC has only held just a handful of meetings with the spot Ether applicants as of this report. The only meeting disclosed by the US SEC on the spot Ether ETF application was last month with Coinbase Global Inc (NASDAQ: COIN). Notably, the meeting was related to Grayscale’s bid to convert its Ethereum Trust into a spot ETF.
“It seems more likely that approval will be delayed until later in 2024, or longer. The regulatory picture still seems cloudy,” Todd Rosenbluth, head of ETF analysis at data firm VettaFi, noted.
According to the US SEC, the approval of spot Bitcoin ETFs was also influenced by the success of the Bitcoin futures ETFs for the past years, in addition to the court ruling during the Grayscale case. While Coinbase has argued that the Ether futures ETF has also been a success, experts believe the agency could turn down the approval based on limited data.
“The agency may argue it has had limited time to observe ether futures. I think that would be the mechanical reason why it would get pushed out, is they just want to see more data,” Matt Hougan, chief investment officer at Bitwise Asset Management, highlighted.
Meanwhile, some experts believe the U.S. SEC will be slapped with several lawsuits if it denies the listing and trading of spot Ether ETFs. Furthermore, Grayscale’s court victory last year against the US SEC compelled the commissioners to approve spot Bitcoin ETFs.
“It’s entirely possible we’ll eventually see ether ETFs. But not until somebody is denied and goes to the courts,” the experts added.
Market Implications
The final decision of the spot Ether ETFs is highly anticipated by the global cryptocurrency community, following the recent Bitcoin halving. If the agency approves the spot Ethereum ETFs, the anticipated altseason will kick start immediately and the Bitcoin dominance shrinks henceforth.
However, if the regulatory agency denies the spot Ether ETF listing, the crypto market will generally get trapped in a short-term correction.
