Ethereum ETF

YEREVAN ( — In recent weeks, discussions between U.S. Ethereum (ETH) ETF applicants and the Securities and Exchange Commission (SEC) have hit a significant roadblock.

According to a Reuters report dated April 24, insiders expect the SEC to deny applications for spot Ether ETFs next month. This forecast is based on recent, one-sided meetings with the regulator involving four participants who wished to remain anonymous. These insiders revealed that the SEC staff avoided discussing the substantial details of the proposed Ethereum ETF products, signaling a possible denial.

The tone of these discussions contrasts sharply with those held in January concerning Bitcoin ETFs. Before approving Bitcoin ETFs, the SEC engaged in detailed dialogues, marking a significant shift from its previous stance. For over a decade, the agency had consistently rejected Bitcoin ETF applications until a pivotal court victory by Grayscale Investments in August 2023.

Analysts Predict Ethereum ETF Delays and Uncertainty

Market experts believe the SEC will not rush to approve Ethereum ETFs. Todd Rosenbluth, a VettaFi ETF data analyst, suggests that approval might be postponed until later in 2024 or beyond. He points to a “cloudy” regulatory environment that complicates the immediate future of Ether ETFs.

ETF Delay Forecast by VettaFi's Analyst — ZoneCrypto Update
ETF Delay Forecast by VettaFi’s Analyst — ZoneCrypto Update

Adding to the skepticism, Bloomberg’s ETF analyst Eric Balchunas estimated the likelihood of approval in May to be a mere 35% back in March, hinting that the SEC might be strategically withholding feedback from fund issuers.

ETF Approval Odds Discussion — Insights by Eric Balchunas
ETF Approval Odds Discussion — Insights by Eric Balchunas

Balchunas also emphasized the impact of SEC Chair Gary Gensler’s views on Ether, noting Gensler’s reluctance to clarify whether Ether qualifies as a security. This uncertainty is a critical factor that could influence the decision-making process.

A Tale of Contrasting Global Approaches

While the U.S. treads cautiously, other regions are advancing more boldly. On April 24, the Securities and Futures Commission (SFC) of Hong Kong greenlit the first batches of spot Bitcoin and Ether ETFs. The approval included three ETFs each for Bitcoin and Ether, launched by prominent firms like China Asset Management, Harvest Global Investments, and Bosera. These ETFs are slated to begin trading on April 30, showcasing Hong Kong’s proactive stance on cryptocurrency products.

List of ETFs launching in Hong Kong. Source: Bloomberg
List of ETFs launching in Hong Kong. Source: Bloomberg

This contrast not only highlights differing regulatory approaches but also underscores the global variation in embracing cryptocurrency innovations. As the U.S. remains hesitant, other parts of the world are stepping forward, setting a dynamic stage for the future of cryptocurrency investments.

The coming weeks are crucial for the future of cryptocurrency ETFs in the U.S. As the SEC weighs its options, the global financial community watches closely, eager to see how these decisions will influence the broader market and international regulatory trends.

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