Eleanor Terrett, a journalist specializing in cryptocurrency and affiliated with Fox Business media outlet, has provided an intriguing update on the potential approval of Ethereum (ETH) spot exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) in May.
However, Terrett suggests that optimism for the approval of at least one Ethereum spot ETF by May 23 is gradually diminishing.
Terrett, citing sources familiar with the matter, notes that recent discussions surrounding the approval of spot Ethereum funds have been one-sided. While issuers of potential Ethereum spot ETFs have attempted to persuade the SEC to initiate the approval process, the securities regulator has not shown the same level of enthusiasm as it did with spot Bitcoin funds.
There are two main reasons behind the SEC’s current stance, according to Terrett. Firstly, SEC Chair Gary Gensler believes that he has already satisfied the crypto industry by approving multiple Bitcoin ETFs. It is worth noting that Gensler’s vote was instrumental in the approval of Bitcoin spot ETFs in the United States.
Furthermore, Terrett highlights that the SEC’s behavior may also be influenced by anti-crypto politicians, including Senator Elizabeth Warren, who are actively opposing the potential approval of Ethereum-based products. These politicians have expressed their displeasure with the SEC’s approval of Bitcoin spot ETFs and are now working to prevent a similar outcome for Ethereum.
With less than two months remaining until May 23, one source has informed Terrett that the SEC needs to begin processing the multiple applications for Ethereum spot ETFs soon if there is to be any chance of approval by the deadline.
Interestingly, prominent ETF analyst Eric Balchunas expressed a similar sentiment last week. Balchunas, who previously predicted that the SEC would approve at least one Ethereum ETF application by May 2024, no longer feels optimistic about this projection.
Balchunas based his revised stance on the recent meeting between SEC staff and representatives from Coinbase on March 6. The meeting centered around Grayscale’s application to convert its Ethereum Trust (ETHE) into a spot Ethereum ETF, with Coinbase acting as the custodian for the potential fund. Balchunas initially considered the meeting a positive sign, but the SEC’s reluctance to provide comments to Ethereum spot ETF issuers has dampened his optimism.
Another factor contributing to Balchunas’ diminished confidence in Ethereum spot ETFs is the fact that the SEC has not faced any legal setbacks regarding the approval of Ether-based funds. It is worth mentioning that the SEC’s approval of all Bitcoin spot ETFs was prompted by a legal defeat against Grayscale Investments in August.
Despite the decline in optimism for the approval of Ethereum spot ETFs by May 23, the price of ETH continues to experience significant gains. The second-largest cryptocurrency recently surpassed the $4,000 resistance level, reaching a 24-hour high of $4,030. At the time of writing, ETH was trading at $4,008, representing a 13.5% increase over the past week.
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