Ethereum ETF approval hangs in the balance as SEC deadline looms

The American SEC may delay a formal declaration on Invesco Galaxy’s application for a spot in Ether ETF, its last shot before the next deadline, July 5. While the United States Securities and Exchange Commission (SEC) has yet to respond to Invesco Galaxy’s application for a spot Ether Exchange-Traded Fund (ETF), the move potentially paves the way for other spot-based ETF proposals.

ETF approval uncertainty

According to a May 6 SEC statement, a decision regarding the application for developing Invesco Galaxy spot Ether can take up to sixty extra days. The ETF (Exchange-Traded Fund) currently has dates until July 5.

Source: SEC.

The Commission concludes that the continued existence of such a longer period will give the Commission a sufficient period to consider the proposed rule change and all issues raised during such consideration. Since then, in all cases, the SEC has extended the decisions on the applications regarding the ETH ETC creation from the eight ETF issuers, including the biggest, BlackRock, and Fidelity. The rest of the issuers, like Franklin Templeton, Hashdex, and Ark 21Shares, await further news from the organization in compliance with market expectations. 

Analysts’ contrasting views

May 23 is the final day of VanEck’s Ethereum EFT Application and the “day of truth,” according to Phill Schwager, Ether Efts analyst at Bloomberg, in a March 20 X post. After the appearance by senior Bloomberg ETF analyst Eric Balchunas on a 3BLM show, he downgraded the odds of the SEC approving. The absence of any significant signal from the SEC could be combined with the growing opposition directed to the chairperson of the SEC, Mr. Gary Gensler, as possible reasons for the approval of the release.

Source: James Seyffart.

Seyffart said he considered altering his “somewhat optimistic” expectations about the Ether ETF applications he had regarded with hope. As of March 20, he is almost convinced that the SEC will likely turn them all down on May 23.

Meanwhile, a concerted opinion from ETF analysts is that it is not now. Anthony Sassano, a proponent of Ethereum, says he still has confidence that the watchdog will approve the funds before VanEck’s deadline.
Sassano elaborated that the SEC had approved Ether future ETF products one year ago; thus, it seemed logical to rely on the arguably not yet approved certain Bitcoin ETF applicants to be able to initiate discussions with the SEC, which indeed occurred when the three above mentioned entities met the SEC on March 9, 2023.