The long-awaited arrival of spot ethereum exchange-traded funds (ETFs) in the US appears to be hitting a snag. Industry leaders are expressing growing concerns about the likelihood of obtaining regulatory approval from the Securities and Exchange Commission (SEC), and the agency's deafening silence is fueling anxieties.
Jan van Eck, CEO of investment firm VanEck, recentlyethereum-etf-approval/” target=”_blank” rel=”nofollow”> cast a shadow of doubt on the possibility of the SEC approving Ether spot ETFs in May. In an interview with CNBC, van Eck expressed his belief that his application would likely be rejected, citing a complete lack of communication from the regulatory body.
This sentiment is echoed in the words of Eric Balchunas, senior ETF analyst at Bloomberg, who has significantly lowered his approval odds to just 35%. Balchunas attributes this pessimism to the current “radio silence” between the SEC and fund issuers.
<blockquote class="twitter-tweet”>
Good scoop twitter.com/joelight?ref_src=twsrc%5Etfw” rel=”nofollow”>@joelight. Definitely interesting but doesn't change our odds. As we have said, the SEC needs to comment on the filing documents (the “critical comments” you mention) and that is not happening yet, even in person they do not offer anything. Silence is violence. https://t.co/z76KTtdmHU
– Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1777403216696660395?ref_src=twsrc%5Etfw” rel=”nofollow”>April 8, 2024
ethereum ETF Applications Languish in SEC Limbo
The SEC's lack of response extends beyond van Eck's request. Seven other Ether spot ETF proposals are currently gathering dust, with no signs of progress. This regulatory purgatory is fueling skepticism among industry commentators. CoinShares CEO Jean-Marie Mognetti believes approval of any of these applications is unlikely “this side of the year,” further amplifying the prevailing uncertainty.
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ethereum is now trading at $3561.8. Chart: TradingView
The current hurdle for ethereum ETFs stands in stark contrast to the success story of bitcoin ETFs. The SEC's green light for bitcoin ETFs offered a ray of hope for the cryptocurrency market. Van Eck highlights growing interest in bitcoin as a “maturing asset class,” with significant untapped investor demand.
In particular, the VanEck Spot bitcoin ETF, known by the symbol HODL, has witnessed significant inflows since its launch in mid-January, signifying strong investor appetite for cryptocurrency exposure.
Lack of clarity creates a murky investment landscape
The lack of interaction from the SEC is a big concern for James Seyffart, another analyst in the field. He points out that “zero comment or interaction from the SEC is a bad sign.” This sentiment suggests a worrying trend in the approval process, further dampening hopes for a quick resolution on the ethereum ETF front.
Despite the current cloud of uncertainty surrounding ethereum ETFs, the cryptocurrency market continues to experience growth and gain greater acceptance. This indicates that opportunities for investment diversification in the digital space are increasing.
However, until the SEC sheds light on its stance, investors and industry stakeholders will be forced to navigate a landscape rife with uncertainty and intense regulatory scrutiny.
The path forward for ethereum ETFs remains shrouded in doubt. The silence from the SEC is deafening, and industry leaders are bracing for possible pushback. With a lack of clear communication and growing skepticism, investors find themselves facing a blank wall, waiting for a signal from the SEC.
Featured image of Micoope, TradingView chart
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