Will Ethereum ETF Be Approved?
The countdown to the final decision by the U.S. Securities and Exchange Commission (SEC) on the Ethereum spot ETF application has officially begun. The SEC must make a final approval or rejection decision on the Ethereum spot ETF application submitted by institutions before May 23rd next week. Market experts and investors are closely watching the SEC’s stance, but many experts believe that the SEC is likely to reject the Ethereum spot ETF application in May. So far, the SEC has not given a clear answer to the core question of whether Ethereum is a security.
After institutions submit the Ethereum spot ETF application, there are four review deadlines (45 days, 45 days, 90 days, and 60 days). If the SEC does not make a decision on the first date, the application will be postponed to the second deadline until the final deadline, when the SEC must make a final decision to approve or reject it.
May 23rd is the final deadline for VanEck, the institution that first submitted the Ethereum spot ETF application. If the SEC approves it, then other institutions’ Ethereum ETF applications will also likely be approved, making it a crucial period for Ethereum ETF.
Scott Johnson, the General Partner of Van Buren Capital, captured part of the official document on the social platform X and posted it, indicating that the SEC’s review decision on the Ethereum spot ETF next week may not be optimistic.
Scott pointed out that the SEC is currently conducting research on the security issues of Ethereum (ETH) for the applied Ethereum spot ETF, but this issue has never been mentioned in the SEC’s review of Bitcoin spot or futures ETFs in the past.
James Seyffart, a Bloomberg analyst, also retweeted Scott’s tweet and stated that this document does increase the possibility of the SEC classifying Ethereum as a security and rejecting the Ethereum spot ETF.
Further reading:
Ethereum Faces “Country-Level” Investigation! Probability of Spot ETF Approval Is Slim, What Are the Issues?
Another Bloomberg ETF analyst, Eric Balchunas, previously predicted that the chances of the SEC approving the Ethereum spot ETF this month are very low. This is because Ethereum currently lacks meaningful interaction with issuers, the attributes of Ethereum in regulatory judgment are still vague, and the recent regulatory investigation of the Ethereum Foundation. All these factors seem to be unfavorable.
Experts: U.S. Presidential Election is the Next Key Point
If the U.S. SEC really rejects VanEck’s application in May, then the Ethereum spot ETF applications from other institutions such as ARK 21Shares, Hashdex, Invesco Galaxy, BlackRock, and Fidelity are also likely to be rejected. However, Jan van Eck, CEO of VanEck, also doubts that the U.S. SEC will approve his application in May.
In addition, Grayscale withdrew its Ethereum spot ETF application without any explanation before the application review on May 7th, which also sparked discussion in the community.
Although the chances of approving the Ethereum ETF this year are quite slim, most experts are optimistic about its long-term development.
The next key timeframe is the U.S. presidential election in November this year.
Currently, one of the presidential candidates, Trump, is leading in some polls. Eric Balchunas pointed out that although Trump does not necessarily support cryptocurrencies and his nominated former SEC Chairman, Jay Clayton, did not approve spot ETFs in the past, Trump is still a more suitable presidential candidate for cryptocurrencies and spot ETFs based on the current situation.
Assuming that a new chairman is appointed in the U.S. next year in April or May, and institutions immediately submit applications after that, the final deadline for SEC’s application decision will be around December 2025.
If a Democratic candidate who has a stricter attitude towards cryptocurrencies, Joe Biden, wins at that time, based on the observation of the application cycle of Bitcoin spot ETFs in the past, after being rejected, there is usually a one-year cooling-off period where institutions do not do anything, and then they gradually resubmit their applications after some time.
Therefore, Eric Balchunas speculates that issuers will first use this summer to heal and adjust their mood, and then see what new opportunities the election will bring.
Reference:
cointelegraph, Decrypt, DL News
