SEC Resistance to Challenge ETH ETFs?

 

Now that the market has moved on from the spot BTC ETFs hype, the cryptocurrency community is abuzz with anticipation as investors eagerly await the potential launch of an Ethereum Exchange-Traded Fund.

Bitcoin ETFs may have been delayed because of politics, but now that the market has more clarity (along with seven deadlines between May and August), Ethereum ETFs may not be far away.

The approval of the Bitcoin ETF has most certainly raised hopes for an Ethereum ETF’s green light, but will it be blocked by internal resistance from the U.S. Securities and Exchange Commission?

While some may consider the launch of a Bitcoin ETF a successful step toward bridging Wall Street with decentralised finance, it seemed as if the SEC was not on board with the initial decision – with big financial personalities criticising and questioning the regulator’s step.

This might reflect on the approval of an ETH ETF, with sources close to the commission indicating a prevailing “hard no” sentiment toward the proposal.

This internal resistance stems from concerns and deliberations within the regulatory body, suggesting that the path to approval may not be as easy and straightforward as some may have hoped.

Commissioner Hester Peirce considers whatever happened with Bitcoin ETFs a “circus”, and is convinced that this will not be seen around an Ether ETF.

Currently, there are seven ETH spot ETF applications sitting on the SEC’s desk, with VanEck first in line with a deadline of May 23, 2024.

The deadline for BlackRock’s application is in August, but while we would expect the world’s largest asset manager to dictate its own terms for the approval, the securities watchdog has already instituted proceedings on VanEck’s applications.

 

Source: Bloomberg Intelligence

The only potential obstacle in the way of a spot ETH approval is liquidity. Just as the size and scale of the market was a concern for a BTC spot product, it will be even more so for ETH, whose move to PoS has further constrained supply.

With the approval of the BTC spot ETF, cryptocurrency not only has broken into TradFi, but has securely taken a seat at its table.

Now, as we anticipate the approval of a spot ETH ETF, markets can prepare for the full-scale institutional integration into the cryptocurrency industry.