In a Coin Desk’s report published on January 10, 2024, Shaurya Malwa mentioned that Ethereum’s native cryptocurrency, ETH, experienced a notable surge, surpassing $2,400, as traders speculated on the potential approval of an Ethereum spot ETF. BlackRock had filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for its iShares Ethereum Trust, contributing to the optimism. This surge in ETH and related token is seen as a response to expected approval of a Bitcoin ETF in the U.S Market sentiment suggests a growing trend of frontrunning the potential Ether ETF, offering professional investors in the U.S direct exposure to Ethereum’s blockchain token. While an Ethereum ETF remains a probability, not a certainty, markets observers noted significant moves in tokens like LIDO, ENS, and MKR, signalling increased attention on Ethereum as traders position themselves for the possibility of ETH ETF approval.
After the U.S SEC approved 11 spot Bitcoin ETFs on January 10, Bloomberg ETF analyst Eric Balchunas predicts a 70% chances of spot Ethereum ETFs getting approval by May 2024. Balchunas argues that the approval of spot Bitcoin ETFs makes the path clearer for Ethereum ETFs, stating that “Ether spot is tied to the hip of Bitcoin spot.” The earliest decision deadline for spot Ethereum ETFs is in May for VanEck, with BlackRock’s deadline in August. If approved, the SEC may greenlight multiple applicants, similar to the spot Bitcoin ETFs. Major asset managers, including BlackRock, VanEck, ARK Invest, 21Shares, Fidelity, and Invesco Galaxy, have filed applications for spot Ether ETFs, with decisions expected between May 23 and August 7. Ethereum’s recent gains, reflecting investor optimism surrounding the potential approval of a spot Ether ETF.
However, Morgan Creek Capital CEO Mark Yusko provides a less optimistic perspective on the prediction of Balchunas. In an exclusive Cointelegraph interview, Yusko suggests the odds of a spot Ethereum ETF approval in U.S. this year are less than 50%, contrary to Balchunas’ outlook. Despite the recent green light for first spot Bitcoin ETF, Yusko points out the SEC’s persistent cautious stance on cryptocurrencies, as indicated by Chairman Gary Gensler. Yusko highlights a potential obstacle: the SEC’s consideration of Ether as a security, unlike Bitcoin, which is classified as a commodity. This difference in classification could present challenges for the approval of a spot Ethereum ETF. The debate reflects the ongoing uncertainties and varied opinions within the cryptocurrency and regulatory spheres.
The SEC has extended the deadline for a decision on Fidelity’s proposed spot Ethereum ETF to March 5, 2024, according to a filing on January 18, 2024. The SEC cited the need for additional time to thoroughly consider the proposed rule change and the associated issues. Fidelity had applied for Fidelity Ethereum Fund in November, emphasizing a court ruling that questioned the SEC’s rationale for approving futures-based products while rejecting spot crypto ETFs.
The delay comes as no surprise to industry observers, with Bloomberg Intelligence ETF analyst James Seyffart noting that key dates to watch are likely in late May. The SEC’s recent approval of 11 spot Bitcoin ETFs has fuelled speculation about the potential approval of a spot Ethereum ETF. Fidelity, along with BlackRock, entered the race for a spot Ethereum ETF last year, following the launch of Ether futures ETFs. Some industry experts believe that the approval of future-based ETFs signals the SEC’s similar consideration of Ethereum and Bitcoin as non-securities, offering insights into their regulatory approach.
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