The approval of the Grayscale Ethereum (ETH) Futures Trust exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) has been delayed once again. The SEC filing on March 22 revealed that the deadline for approval has been extended from March 31 to May 30.
This decision has sparked significant interest and speculation within the cryptocurrency community as it directly impacts the status of Grayscale’s Ethereum Futures Trust ETF. The delay comes at a time when the broader regulatory landscape is increasingly scrutinizing crypto-based financial products, following the recent approval of Bitcoin ETFs earlier this year.
The SEC has continuously postponed the decision on Grayscale’s Ethereum ETF application, seeking additional time to evaluate the proposed rule change and address concerns raised. The original decision date of December 2023 was postponed due to the need for additional public input.
The SEC further extended its decision-making process on Grayscale’s Ethereum ETF as well as BlackRock’s application for an ether ETF in January. This has led to increasing uncertainties regarding the approval timeline and inquiries into the regulatory prospects for crypto-based financial products.
Analysts suggest that the approval of Ethereum-based ETFs could potentially lead to a surge in Ethereum prices, positioning it as a strong competitor to Bitcoin (BTC) in the market. Therefore, the decision on Grayscale’s Ethereum Futures Trust ETF remains a focal point in the crypto investment landscape, shaping the future trajectory of Ethereum and the broader cryptocurrency market.
Earlier this month, the SEC met with spot Ethereum ETF applicants to discuss bids for Ether-based investment vehicles. This meeting came amidst a surge of interest in spot Ethereum ETFs following the successful launch of spot Bitcoin products.
The SEC has postponed decisions on spot Ether-based products until at least May, creating a sense of uncertainty within the industry. VanEck’s filing holds a pivotal position, with the SEC facing a deadline of May 23 to either accept or reject their bid, setting the tone for subsequent decisions on similar applications from prominent asset managers.
The path to approving spot Ethereum ETFs has faced challenges as the SEC grappled with regulatory complexities and concerns unique to Ethereum compared to Bitcoin. Jake Chervinsky, Chief Legal Officer at Variant Fund, has expressed uncertainty regarding the approval of spot Ethereum ETFs by the SEC by the May deadline. Chervinsky’s doubts stem from legal issues and the policy environment in Washington, D.C., which he believes make denial or a request for withdrawal by the SEC more likely than approval.
SEC Chair Gary Gensler’s cautious approach to cryptocurrencies has introduced an additional level of uncertainty into the approval process, highlighting the high-risk nature of crypto assets and the necessity for consensus among commissioners.
Despite the growing interest and anticipation surrounding spot Ethereum ETFs, regulatory challenges and ongoing dialogues with issuers have highlighted the complex dynamics influencing the future of Ether-based investment products in the market.