U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce, often referred to as “crypto mom” for her positive stance on cryptocurrencies, shared her insights on Ethereum in a recent interview with Coinage Media.
Peirce suggested that the US SEC may not require a lawsuit to guide its decision to approve an Ethereum spot ETF.
SEC Commissioner’s Optimistic Outlook on Ethereum ETF
Peirce cited the Grayscale court ruling that was instrumental in getting the SEC to approve a spot Bitcoin ETF. She emphasized that the U.S. SEC should not wait for court intervention to correct its approach, acknowledging that the regulator’s actions were “arbitrary and capricious.”
The SEC Commissioner stated in an interview:
We shouldn’t need a court to tell us that our approach is ‘arbitrary and capricious.’ (…) It takes a lot of effort to bring an exchange-traded product to the market. Ensure that what is disclosed matches how the product actually works. (…) After hearing from the court that the approach we took was wrong (…) I think those lessons will definitely stay with us.
This recognition signals a potential openness to applying the same precedent to future Ethereum ETF applications, although recognizing that the specific facts and circumstances of each application may differ significantly. However, one member cannot decide the decisions of the entire committee.
The US SEC recently extended the decision timeline for Fidelity’s proposed Ethereum spot ETF. On January 18, 2024, the SEC announced a 45-day extension to more thoroughly review the proposal.
fidelity #Ethereum The ETF was just postponed. Totally expected. The really important date, in my opinion, is the end of May. https://t.co/8mvhcPRaS7
— James Seyff (@JSeyff) January 18, 2024
According to the SEC, this delay ensures “sufficient time to consider the proposed rule change and the issues it raises.”
Ethereum spot ETF approval likely
The cryptocurrency community in particular remains cautiously optimistic. Analysts such as Bloomberg’s Eric Balchunas have suggested a 70% chance of an Ethereum spot ETF being approved by May, especially considering “multiple applications pending review.”
So far, several prominent financial firms, including BlackRock, ARK 21Shares, VanEck, Invesco Galaxy, Fidelity, Hashdex, and Grayscale, are competing in the race to gain US SEC approval for their respective spot Ethereum ETF proposals.
Digital asset lawyer Joe Carlasare expressed confidence in approval within the year, citing the high correlation of ETH futures with existing ETH futures traded on the Chicago Mercantile Exchange (CME) and the spot market.
Carlasare points out that the SEC’s approval of a spot Bitcoin ETF is contingent on the existence of a regulated futures market, and argues that a similar rationale should apply to Ethereum.
In my opinion, the SEC’s analysis of approval of a spot Bitcoin ETF almost guarantees approval of an ETH spot ETF for the following reasons.
1. ETH futures are already trading on CME.
2. The SEC has already approved the ETH futures ETF.
3. CME is the same… pic.twitter.com/bCSUymdc6e— Joe Carlasare (@JoeCarlasare) January 15, 2024
Featured image by Unsplash, chart by TradingView