What are the chances now that the launch of spot Ethereum ETFs will get the nod in May? The crypto community notes a lack of activity in dialog between regulators and applicants. Will the timeline get pushed back?
Chances that spot Ethereum ETFs will be approved in May are not very high. Despite the optimistic forecast of Standard Chartered analysts, there are a number of conflicting opinions:
1. Analysts at TD Cowen believe that the SEC is unlikely to approve new cryptocurrency ETFs in the near future for reasons of political expediency on the part of the regulator’s top management.
Given the number and magnitude of major scandals and crashes in the crypto space in recent years, by approving Ethereum and other crypto ETFs, Gensler and the SEC could face criticism for pushing retail investors into overly risky investments.
For the current SEC leadership, a more politically advantageous strategy may be to take a restrained and cautious approach to approving new cryptocurrency ETFs. This will avoid accusations of excessive industry loyalty from skeptical politicians and consumer rights’ advocates.
2. The crypto community notes the lack of activity in the dialog between the SEC and potential issuers of ETFs on Ethereum.
3. The SEC does not currently have a lawsuit against Grayscale regarding Ethereum ETFs, as it did with the GBTC Bitcoin Trust. Accordingly, there is no additional pressure on the regulator to make a decision as quickly as possible.
On March 19, the SEC announced the postponement of decisions on the Ark 21 Shares and Hashdex ETFs with deadlines until May 24 and 30. On April 23, the SEC postponed its decision on applications for spot Ethereum ETFs filed by Franklin Templeton and Grayscale to June 11 and June 23, respectively.
Thus, while the launch of an Ethereum ETF in May is technically possible, we are more inclined to believe that the consideration of this issue may be rolled back due to the lack of significant pressure on the SEC and the uncertainty in its stance regarding Ethereum.