Silence from SEC: Ethereum ETF Approval Chances Dimmed, Still Inevitable
Summary:
The Securities and Exchange Commission's (SEC) silence towards the issuers of Ether (ETH) exchange-traded funds (ETFs) could suggest a decreased probability of ETF approval by May. Bloomberg's ETF analyst, Eric Balchunas, has lowered the approval odds to 35%, seeing SEC Chair Gary Gensler's view of Ether as a security rather than a commodity as a possible hindrance. Balchunas also described the ETF process for Ether as the reverse of that for the Bitcoin ETF. Potential changes following the upcoming U.S. Presidential election could impact the situation further, but Balchunas is confident that a spot Ether ETF approval is inevitable but unpredictable in terms of timing.
The probability rating for the approval of Ether (ETH) exchange-traded funds (ETFs) by May has been decreased to 35% due to what could be silent treatment from the Securities and Exchange Commission (SEC), according to Eric Balchunas, Bloomberg's ETF analyst. He observed that the lack of feedback from the SEC to issuers, despite being only 73 days away from the final deadline, is a negative indication. Balchunas believes that the criticism of the ETF applications by the SEC and subsequent amendments by the issuers is an extended procedure that includes probable refiling and meetings.
He claims to have reliable inside information which suggests that the SEC might intentionally not be engaging with the prospective issuers of the funds. Moreover, Balchunas thinks that Gary Gensler, the chair of the SEC, considers Ether as a security asset and might be hesitant to approve of Ether ETF in the midst of a contentious political environment. Gensler's perspective might be influenced by the controversy stirred up by the approval of Bitcoin ETFs and the legal setback his commission suffered at the hands of Grayscale in August 2023.
Furthermore, Balchunas felt that the ETF process for Ether was running counter to what he observed with the Bitcoin ETF race. His evaluation, though personal and intuitive, played a crucial role in determining the prospects of Ether ETF being approved. Balchunas emphasized the strange situation where the SEC approved several ETH futures ETF products in October and currently appears to procrastinate in approving spot products.
In a different light, Consensys' general counsel, Matt Corva, thinks that the denial of an ETH ETF could be promising for the long term. He bases his view on the idea that the SEC would lose its ground to oppose other coins, which could be a favorable result.
A recent meeting between Coinbase, a global crypto exchange, and Grayscale, an asset management firm, and SEC officials, centered on proposing a rule change for launching spot Ether ETFs, was perceived as positive by many in the crypto industry. However, Balchunas favoured the strong argument presented by Scott Johnsson, a general partner at VB Capital, that approval or denial of ETFs might be grounded on a correlation study.
With the prospect of SEC rejecting the Ether ETF applications in totality, Balchunas suggests that the next critical date to look out for is November 5, the U.S Presidential elections day. He anticipates dynamic changes post-elections, regardless of who wins. In his view, the question is not IF a spot Ether ETF would be approved, but WHEN, asserting that an approval is virtually inevitable in the long run.
Published At
3/12/2024 6:35:40 AM
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