U.S. SEC Delays Decision on Ethereum Spot ETF Approval to July 5, Analyst Predicts Low Probability of Approval in May
The U.S. Securities and Exchange Commission (SEC) has announced a postponement in its decision on the Ethereum spot Exchange-Traded Fund (ETF) application submitted jointly by Invesco and Galaxy Digital, setting a new date of July 5. This delay is intended to allow additional time for thorough consideration of the proposal. In a statement released earlier this week, the SEC declared that it requires more time to assess the proposed rule changes and the implications involved.
This is not the first delay for the Ethereum ETF proposals by Invesco and Galaxy Digital, as the SEC had previously extended its decision timeline and sought public comments in February. In recent weeks, the SEC has also postponed decisions on other Ethereum spot ETF proposals from major financial firms including Grayscale, Franklin Templeton, VanEck, and BlackRock.
The choice of July 5 as the new decision date stems from the SEC’s authority under the Securities Exchange Act to extend the review period by an additional 60 days following an initial 180 days, which was widely expected by analysts to conclude by May 6. However, the extension to July 5 reflects ongoing uncertainties and regulatory considerations.
Despite the SEC approving 11 Bitcoin spot ETFs earlier in January, hopes were initially high for a swift approval of Ethereum spot ETFs as well. Contrarily, the Hong Kong Stock Exchange preceded the U.S. by launching the first Ethereum spot ETFs on April 30. As the SEC prolongs its timeline, reports suggest the regulatory body is exploring the classification of Ethereum as a security, requesting communications and financial records related to the Ethereum Foundation from several companies. These developments have tempered expectations and generated concerns within the cryptocurrency community about the potential approval of Ethereum spot ETFs.
Bloomberg ETF analyst Eric Balchunas initially estimated a 70% chance of these ETFs being approved by the end of May. However, he has since revised this likelihood down to 25%. Investment bank TD Cowen also holds a pessimistic view on the short-term approval chances, suggesting that approval might be more likely after the U.S. presidential elections in November.
This ongoing uncertainty regarding Ethereum spot ETFs in the U.S. highlights the cautious approach of the SEC towards cryptocurrency integrations into mainstream financial products, as the market awaits further regulatory clarity.
