The SEC has delayed Fidelity’s Ethereum spot ETF, but a decision is still expected in May.

The U.S. Securities and Exchange Commission (SEC) announced on January 18 that it had postponed its decision on Fidelity’s proposed spot Ethereum ETF.

More specifically, the decision concerns a proposed rule change that would allow Cboe BZX to list and trade shares of Fidelity’s planned funds.

The SEC noted that the proposed rule changes were originally filed on November 17, 2023, and were published in the Federal Register for comment on December 6, 2023.

As of that date today, the SEC said it must initiate the process to determine whether to approve, reject or disapprove previously proposed rule changes by Jan. 20. However, we have now chosen to use a clause that allows: The deadline is extended by 45 days to March 5, 2024.

The SEC will likely choose to initiate proceedings against Fidelity in March, as it has done with respect to certain other pending funds.

The SEC is expected to decide on the ETH ETF in May.

Bloomberg ETF analyst James Seyffart said today Fidelity insisted the delay was “entirely expected” and that the late May deadline was “really important.”

The May deadline appears to be related to the fact that the SEC has until May 23 to approve or reject VanEck’s competing spot Ethereum ETF proposal.

The SEC cannot delay its decision any longer because it has already begun proceedings on VanEck’s application. And since the SEC typically approves similar ETFs together, it will likely decide on any pending spot Ethereum ETFs by the end of May, even if other application deadlines are later.

It is also important to note that Fidelity, VanEck, and several other applicants were successful in gaining approval for a spot Bitcoin ETF on January 10th. The success of these Bitcoin ETFs is no guarantee that the Ethereum ETF proposal will also gain approval.

Public expectations are divided. A prediction market from Polymarket currently reports that the odds in favor of approval for a spot Ethereum ETF are 54%.