Share this article
A spot Bitcoin exchange-traded fund (ETF) has been approved, but a spot Ethereum ETF may also receive approval. According to a Reuters report published today, sources familiar with recent talks between the ETF issuer and the SEC suggested that the agency is likely to reject the spot Ethereum ETF at its final review next month.
The SEC’s decisions on VanEck’s and ARK’s filings are due May 23 and May 24, respectively. Unlike discussions prior to the SEC’s approval of a spot Bitcoin fund, recent talks have been lacking in content, with SEC staff not engaging in detailed conversations about the proposed Ethereum ETF, according to four people involved in the SEC meeting. .
Sources also noted that despite ETF issuers’ claims that the approved spot Bitcoin ETF and Ethereum futures-based ETF set a precedent, the SEC’s silence on specific concerns points to a possible rejection.
The SEC hasn’t had many meetings regarding its review of the spot Ethereum ETF, according to SEC records and sources familiar with the matter. Of the few meetings, only one has been made public. The meeting was with Coinbase regarding Grayscale’s bid to convert the Ethereum Trust into an ETF. Coinbase will serve as custodian for this ETF.
If the SEC rejects an Ethereum ETF, applicants expect the reason will be broader issues, such as concerns about the quality and depth of Ethereum-related market data.
Matt Hougan, chief investment officer at Bitwise Asset Management, one of the Ethereum ETF applicants, suggests the SEC may want more time to study the Ethereum futures market before making a decision.
The SEC’s approach to spot Ethereum ETF filings differs significantly from the past, when there were intensive and detailed conversations before the SEC approved a spot Bitcoin ETF in January.
Brokerages have historically rejected spot Bitcoin ETFs due to concerns about market manipulation. But they were ultimately forced to approve it following a successful court challenge from Grayscale Investments.
In a previous commentary, analysts at JPMorgan suggested that if the SEC refuses to report Ethereum spot, ETF issuers could initiate legal action against the agency, which could eventually force the SEC to review and approve trading in these products.
The current frustrating situation prompted VanEck’s CEO, Jan van Eck, to voice a similar refusal. He recently told CNBC that VanEck’s application and ARK Invest’s application will be rejected first.
Share this article