SEC Delays Spot Ethereum ETFs Amidst Rising Interest in Bitcoin

• The US SEC has set the next deadline for Invesco Galaxy’s Ethereum spot ETF on July 5, 2024.
• The US SEC has postponed several spot Ether ETFs in the recent past including for Grayscale, Franklin Templeton, VanEck, and BlackRock.

On Monday, May 6, 2024, the United States Securities and Exchange Commission (SEC) announced its intent to postpone the deadline for either approving or disapproving the proposed rule change to list and trade shares of Invesco Galaxy Ethereum ETF. Notably, Cboe BZX Exchange filed with the US SEC on October 20, 2023, to list Invesco Galaxy Ethereum ETF. 

“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission designates July 5, 2024, as the date by which the Commission shall either approve or disapprove the proposed rule change,” the agency noted.

US SEC Sees Ethereum as a Security

As Crypto News Flash previously pointed out, the approval of spot Ether ETFs in the United States is in limbo as the SEC continues to hold the stance that Ethereum is a security. From the plain view, the US SEC will most likely deny the approval of spot Ether ETFs later this month. 

Furthermore, the US SEC has continued to argue that Ethereum is a security asset under the Howey test. The agency has been met with immense resistance led by Consensys which recently filed a lawsuit and argued that Ethereum is a global computing platform and not an investment scheme. Consequently, Consensys believes Ethereum is a commodity just like Bitcoin and Gold. 

According to John Reed Stark – a senior law lecturer and former chief of Internet Enforcement at SEC – during Tuesday’s written testimony before the US House of Representatives Financial Service Committee, the US SEC is following the law in protecting crypto investors against predatory behaviors.

Bitcoin Demand Unshaken

The demand for Bitcoin (BTC) has continued to grow immensely in the recent past following the approval of spot BTC ETFs in Hong Kong and the United States. As Crypto News Flash noted, Grayscale’s GBTC recently recorded its first cash inflow since the approval, thus ending the losing streak.

With the fourth Bitcoin halving already being felt amid rising demand, crypto analysts are confident the flagship coin will make a new ATH in the coming weeks. Furthermore, the US Federal Reserve is expected to cut the interest rate’s benchmark later this year.

Direct Impact on ETH Price Action

Speculation on Ethereum price action has escalated amid the anticipated altcoin season. The large-cap altcoin, with a fully diluted valuation of about $368 billion and total value locked of more than $55 billion, has rebounded around 3 percent in the past week to trade around $3,070 on Monday.

From a technical standpoint, Ethereum’s price is aiming for ATH in the coming weeks if it manages to consistently close above $3,380. Moreover, the daily 50 MA has been acting as a strong resistance level in the past few weeks.