Based on information from CNBC, representatives of Bitcoin spot ETF providers have voiced doubts that the SEC will give the green light to comparable Ethereum spot ETFs.
Anxious investors, among them BlackRock, Fidelity, and VanEck, are eagerly anticipating the SEC’s decision on approving Ethereum ETF proposals. However, some applicants express uncertainty regarding the SEC’s approval status.
Uncertainty Looms For Ethereum ETFs
According to the report, SEC Chair Gary Gensler’s focus on applying securities laws to crypto assets like Ethereum for an ETF has added complexity to the situation. Gensler believes that most cryptocurrencies function as investment contracts, aligning with the SEC’s viewpoint.
Jan Van Eck, CEO of VanEck, shares his expectation that their Ethereum ETF application will be denied based on the lengthy feedback from regulatory bodies over the past few weeks.
According to VanEck’s perspective, the way the SEC handles its decision-making regarding Bitcoin ETFs is akin to a lengthy review process that ultimately results in approval. On the other hand, there’s still ambiguity surrounding Ethereum ETFs. The CEO of VanEck added:
In the US, we were among the earliest to submit applications for Ethereum. Cathy Wood of Ark Invest and I may be among the frontrunners, but it’s likely that our applications could be denied come May.
According to Jean-Marie Mognetti, the CEO of CoinShares, he holds a similar gloomy viewpoint. He does not anticipate any upcoming approvals, particularly for Ethereum’s proof of stake protocols.
Proof Of Stake Protocol Complicates SEC Decision?
The SEC’s approval of Bitcoin’s proof-of-work system, which is how it creates new units, doesn’t conflict with securities laws because US regulators, headed by Gensler, have classified Bitcoin as a commodity.
Ethereum’s use of proof of stake (PoS) may hinder the approval of Ethereum ETFs in the US, as this has historically allowed traditional financial institutions to broaden their customer base and bring cryptocurrency products to more investors.
In simpler terms, while Bitcoin depends on unpaid miners to process transactions and mint new coins, Ethereum uses a proof of stake system where users pledge their current tokens as collateral to maintain the network’s security.
The SEC’s concerns over this protocol add another hurdle to the Ethereum ETFs being granted approval, according to CoinShares CEO, who added, “I don’t think anything will be approved before the end of the year.”
In the end, market players are anxiously looking forward to the Securities and Exchange Commission (SEC) announcing whether they will allow or reject Ethereum Exchange-Traded Funds (ETFs). At the same time, providers of Bitcoin spot ETFs are readying themselves for this decision and working within the regulatory framework to introduce investment vehicles connected to Ethereum.
The SEC has until May to finish examining Ethereum ETF proposals, having postponed its initial March verdict.
The current cost of Ethereum is $3,518, representing a 2.5% drop over the previous 24-hour period. This decrease continues a pattern of price declines seen over the last month, leading to a total loss of almost 10% in value.
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2024-04-10 04:11