The United States Securities and Exchange Commission (SEC) rolled back its decision on BlackRock’s spot Ethereum ETF until March 10. It should not be ruled out that the deadline will be extended yet again. Why is the Commission dragging its feet given the current market dynamic? Shouldn't the bitcoin experience optimize the decision-making timeframe?
Despite the launch of spot bitcoin ETFs, the SEC is in no hurry to greenlight Ethereum ETFs. In our view, the main reasons for the delay are as follows:
1. Gary Gensler wants to see how spot bitcoin ETF trading goes. Since January 11, there has been little time to draw any conclusions.
2. There are most likely some concerns regarding the stability of the Ethereum ecosystem after the transition to POS, as well as potential vulnerabilities of smart contracts.
3. Uncertainty of cryptocurrency regulatory policy. Although ether is not a security, the SEC does not yet have clear rules for regulating it. This poses risks for investors.
4. Pressure from traditional financial institutions that are not interested in heightened competition from crypto products.
5. Personal hostility of SEC management towards cryptocurrencies. Gensler has repeatedly criticized the industry for insufficient investor protection.
Most likely, the decision will be postponed until the regulator is confident in the reliability of the Ethereum infrastructure. In our view, there is still a chance for a positive outcome.