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Crypto: SEC Delays Decision on Ethereum Spot ETFs

Wed 24 Apr 2024 ▪ 3 min of reading ▪ by Fenelon L.
Crypto regulation

The United States Securities and Exchange Commission (SEC) has once again postponed its decision on the spot Ethereum ETF proposals filed by Grayscale Investments and Franklin Templeton. Both asset management firms will have to wait longer before they can launch their crypto investment vehicles on the American stock markets.

SEC postpones decision on Ethereum crypto ETFs

The race for Ethereum ETFs is heating up

Last January, the SEC finally approved 11 Bitcoin ETFs after a decade of rejections, thus paving the way for traditional investors eager to gain exposure to the leading cryptocurrency. These investment instruments quickly found success, recording massive inflows in just a few months.

Emboldened by this precedent, Grayscale filed last October a request to convert its Grayscale Ethereum Trust (ETHE) into a spot ETH ETF. Franklin Templeton followed suit in February by submitting an S1 form to the SEC.

The two asset management giants thereby hope to provide their clients with an investment vehicle that will allow them to gain exposure to Ether, the second-largest cryptocurrency in terms of market capitalization.

A new delay that raises questions

Despite the enthusiasm from fund managers, industry analysts remain rather pessimistic regarding a swift approval of Ethereum ETFs by the regulator. Investment bank JP Morgan estimates that there is less than a 50% chance that such a product will be approved by the May deadline.

If refused, the applicant firms may decide to take legal action against the SEC. However, the regulatory authority seems determined to take the time necessary to thoroughly examine the files submitted, in order to ensure that the investors’ interests are adequately protected.

While Bitcoin ETFs have already made their entrance on the American markets, their Ethereum counterparts are still awaiting their turn. The SEC’s decision, whether positive or negative, will have a definite impact on the cryptocurrency industry and the democratization of these digital assets to the general public. The coming months are therefore crucial for the future of crypto ETFs in the United States.

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Fenelon L. avatar
Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.