crypto industry experts believe that regulators will likely deny approval for public trading to ethereum (eth) spot ETFs next month.
A refusal would likely mean that US investors will not receive any such products until December 2024 at the earliest, which would put the digital currency far behind bitcoin (btc) in terms of adoption by Wall Street.
Why ethereum ETFs Are Unlikely?
Sources contacted by Reuters They say the few meetings between the Securities and Exchange Commission (SEC) and aspiring ethereum ETF issuers have been one-sided.
Agency staff have not discussed substantial details about the proposed products, even though the deadline for applications submitted by VanECK and ARK expires in less than a month.
That's a stark contrast to the internal conversations that preceded the bitcoin spot ETF approvals in January, during which regulators helped sponsors fine-tune their applications for months around details like in-kind versus cash refunds. .
“It seems more likely that approval will be delayed until late 2024, or longer,” said Todd Rosenbluth, head of ETF research at VettaFi. “The regulatory landscape still looks cloudy.”
Sources say ETF issuers' arguments in favor of approval mainly revolve around the listing of ethereum futures ETFs in October, setting a precedent that eth-based investment products are sufficiently insurance for public markets.
Such arguments mirror those of Grayscale when it sued the SEC over bitcoin spot ETF denials in 2022. Grayscale's resounding victory in that lawsuit a year later largely inspired the agency to approve the ETFs.
However, the SEC generally did not raise specific counter-questions, implying that they are not considering the requests seriously and will reject them anyway.
Will there be another lawsuit?
“It is very possible that we will eventually see ether ETFs,” one source said. “But not until someone is denied and goes to court.”
Earlier this month, Bloomberg ETF analyst Eric Balchunas suggested that Grayscale may not want to fund another lawsuit as its potential financial reward would be lower.
“That's a lot of time and money for something that may only get a fraction of the aum,” he wrote at the time.
The SEC chairman is an outspoken critic of cryptocurrencies in his personal capacity, claiming that it has few unique use cases other than illicit financial activity, and that it is fundamentally centralized.
According to Bitwise Chief Investment Officer (CIO) Matt Hougan, the SEC can justify its denial of the ethereum ETF by saying it had little time to review the product.
“I think that would be the mechanical reason why it would be removed: they just want to see more data.”
LIMITED OFFER 2024 for CryptoPotato readers on Bybit: Use this link to register and open a $500 btc-USDT position on the Bybit Exchange for free!
<!– ai CONTENT END 1 –>
