SEC Says ‘No’ to Ethereum ETFs, but Issuers Keep the Faith

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The approval of spot Ethereum Exchange-Traded Funds faces uncertainty as the U.S. Securities and Exchange Commission exhibits resistance. Fox Business reporter Eleanor Terrett sheds light on diverse expectations surrounding the SEC’s stance, revealing potential challenges and conflicting opinions.

SEC’s Current Position

Terrett reports a “hard no” from sources within the SEC, signaling “some internal resistance” to approving spot Ethereum ETF. 

In her tweet, Terrett also mentions SEC commissioner Hester Peirce, known for her pro-cryptocurrency stance, who has been advocating for a more straightforward decision process. Pierce criticized the reliance on legal victories to guide ETF approvals.

Despite SEC resistance, Terrett highlights optimism among asset managers like BlackRock, whose track record of getting ETFs approved has raised hopes of getting Ethereum ETFs approved by summer this year. Blackrock expresses confidence, citing the smooth launch of Bitcoin spots as a potential catalyst for Ethereum spot ETF approval.

Terrett anticipates further insights into the SEC’s stance in the coming months, mainly through engagements with S-1 registration forms. 

Varying Expectations

Expectations on spot Ethereum ETF are varying. Bloomberg ETF analyst Eric Balchunas suggests a 70% chance of approval in May, while JP Morgan’s Nikolaos Panigirtzoglou is less optimistic, predicting a 50% chance.

JP Morgan Analysts’ Cautious Stance

JP Morgan analysts, led by Nikolaos Panigirtzoglou, remain cautious, estimating the likelihood of approval to be no higher than 50%. Regulatory and judicial considerations and uncertainty surrounding Ethereum’s classification as a commodity or security contribute to their skepticism.

Upcoming Developments

The SEC’s recent delay in deciding on Fidelity’s Ethereum Spot ETF until March 5, 2024, extends the evaluation period. The final decision on Spot Ethereum ETFs is expected between late January and August 2024.

The approval of spot Ethereum ETFs remains clouded in uncertainty, with conflicting signals from the SEC, varying expectations from expert figures, and ongoing regulatory uncertainties.