According to a report from CNBC, issuers of spot bitcoin exchange-traded funds (ETFs) have expressed skepticism that the US Securities and Exchange Commission (SEC) will approve similar spot ethereum ETFs.
Market participants, including asset managers BlackRock, Fidelity, and VanEck, are eagerly awaiting the approval of ethereum. ETF Productsbut some issuers are unsure of the SEC's green light.
Uncertainty stalks ethereum ETFs
He bitcoin-etf-issuers-sec-wont-approve-ether-eth-exchange-traded-fund-.html” target=”_blank” rel=”noopener nofollow”>report notes that SEC Chairman Gary Gensler's emphasis on crypto assets subject to federal securities laws has further complicated matters for an ethereum ETF. Gensler has asserted that most crypto assets are investment contracts, consistent with the SEC's view.
Interestingly, VanEck CEO Jan Van Eck anticipates a rejection of its ethereum ETF application, stating that regulators have been providing feedback on the application for weeks.
Van Eck believes the SEC's decision-making process is similar to that of bitcoin ETFs, where lengthy reviews ultimately lead to approval. However, the outlook for ethereum ETFs remains uncertain. VanEck's CEO further noted:
We were also the first to apply for ethereum in the US, and myself and (Ark Invest CEO Cathy Wood) are the first in line for May, I guess, to be rejected.
CoinShares CEO Jean-Marie Mognetti shares this pessimism, stating that he does not foresee any approvals anytime soon, especially for ethereum-specific proof-of-stake protocols.
Does proof-of-stake protocol complicate SEC decision?
The SEC's acceptance of proof-of-work (PoW), the protocol underlying bitcoin, has not raised securities law concerns. crypto-regulation-and-stablecoins.html?&qsearchterm=gary%20gensler” target=”_blank” rel=”noopener nofollow”>considered a commodity by US regulators led by Gensler.
However, the proof-of-stake (PoS) that is fundamental to ethereum poses a challenge to the approval of ethereum ETFs, which, as bitcoin has continually witnessed, opens the door to traditional financial institutions to increase adoption and offer these products to a greater number of investors in the US.
While bitcoin relies on volunteer miners to validate transactions and create new tokens, ethereum proof of stake protocol It relies on participants staking their existing tokens to secure the network.
The SEC's reservations about this protocol are another obstacle to the approval of ethereum ETFs, as highlighted by the CEO of CoinShare, who further stated: “I don't see anything being approved this side of the year.”
Ultimately, market participants are anxiously awaiting the SEC's decision on whether to approve or disapprove ethereum ETFs, while bitcoin spot ETF issuers are preparing for the outcome and navigating the regulatory landscape to offer products. investment linked to ethereum.
It's worth noting that the SEC has a May deadline to complete its review of ethereum ETF applications. after already pushing back its original March decision deadline.
The price of eth stands at $3,518, reflecting a 2.5% decline in the last 24 hours. This drop extends the downward trend observed over the last 30 days, which translates into a cumulative drop of close to 10%.
Featured image from Shutterstock, chart from TradingView.com
