SEC Delays Decision on Ether ETFs; Grayscale Considers Adding Staking
Summary:
The U.S. Securities and Exchange Commission (SEC) has delayed its decision regarding the proposed spot Ether (ETH) exchange-traded funds (ETFs) by Hashdex and ARK 21Shares. The verdicts are now expected by May's end, with some analysts expressing pessimism about the prospects of approval for these and six other current Ether ETF candidates. Meanwhile, asset manager Grayscale is considering adding staking to its spot Ether ETF proposal to mitigate inflationary pressures and maintain parity with any similar investment products that provide staking.
The choice by the U.S. Securities and Exchange Commission (SEC) to defer its judgment on the proposed spot Ether (ETH) exchange-traded funds (ETFs) by Hashdex and ARK 21Shares has been pushed back. This decision to put off a decision till later has arrived just ahead of the SEC's "third cut-off time"; a concluding decision regarding both Ether ETF proposals is anticipated by the end of May. ARK 21Shares will have an ultimate decision by May 24, whereas the deadline set by the regulatory body for Hashdex's application is expected to be on or not later than May 30.
There has been a recent dip in optimism regarding the chances of approval for the eight Ether ETFs that are currently in contention by BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton. According to Bloomberg ETF analyst James Seyffart's March 19th statement, concerns have risen due to the absence of interaction between the SEC and the issuers.
In contrast to his perspective from prior months, Seyffart claimed that he now speculates that these will ultimately face rejection by May 23rd. Another Bloomberg ETF analyst, Eric Balchunas, reduced the likelihood of Ether ETF approval from 50% to 35% last week. Balchunas informed Cointelegraph that the Ether ETF procedure seems to be the complete opposite of what he had witnessed during the spot Bitcoin (BTC) ETF competition because of the SEC's silence.
The market seems to echo these sentiments, as Polymarket odds for Ether ETFs being ratified by May's end have slipped to 32%, a significant decrease from 77% in January. Approximately $2.2 million has been gambled on the result of the Ether ETFs on the decentralized betting platform, Polymarket.
In more recent news, asset manager Grayscale has become the latest organization to contemplate incorporating staking into their spot Ether ETF application. In a notice seeking consent sent to members of its Grayscale Ethereum Trust, four potential propositions have been outlined, including giving the trust the capability to stake Ether.
Grayscale has suggested that allowing the Ethereum held by the trust to be staked would combat the inflationary pressures of Ethereum’s proof-of-stake protocol. It could also help maintain compatibility with any comparable investments that offer staking. The proposals will be put to the vote, and they need consent from more than 50% of shares. If this approval is obtained, Grayscale could join the ranks of ARK 21Shares, Franklin Templeton and Fidelity, who have recently included Ether staking in their spot ETF applications.
Published At
3/20/2024 3:36:37 AM
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