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As anticipated by market observers, the US Securities and Exchange Commission (SEC) has once again delayed its decision on BlackRock’s petition for an Ethereum ETF. This comes after the initial postponement in January following the SEC’s approval of multiple Bitcoin ETFs. Experts, including James Seyffart of Bloomberg ETF, are eyeing May 23 as the potential date for a decisive ruling.
Seyffart emphasizes May 23 as the “next significant date” in the timetable of events. This date holds importance as market participants anxiously await a potential resolution regarding the authorization of spot Ethereum ETFs.
New Players in the Race for ETH ETFs
Before BlackRock’s ETF proposal delay in January, the SEC had extended the deadline for Fidelity’s proposed ETF. Other contenders in the race for spot ETH ETFs are revising their offers. Ark 21Shares recently updated its documentation, incorporating references to staking, indicating a more thorough approach. Franklin Templeton, which entered the market in February, differentiated itself by omitting brackets from staking language, suggesting a firmer stance in their proposal.
How Will the Price of Ethereum React Upon Approval as an ETF?
Reflecting on the SEC’s historic approval of more than ten spot Bitcoin ETFs at the beginning of 2024, the focus shifts to the potential impact on Ethereum’s price upon ETF approval. The surge in Bitcoin prices leading up to the approval and subsequent decline raises questions about how Ethereum might fare.
Standard Chartered suggests a potential approval of Ethereum ETFs by May 23, considering the SEC’s previous filings that did not designate ETH as a security. Despite positive indicators, there is no guarantee of approval. The upcoming Ethereum upgrades, slated for the first quarter of 2024, add a layer of uncertainty. However, lessons from the Bitcoin ETF scenario might prompt the market to make different decisions, leading to a unique outcome for Ethereum ETFs.
Franklin Templeton Joined Ethereum ETF Contest
As the competition for Ethereum ETF spots intensifies, Franklin Templeton enters the arena with eight applications. This move underscores the increasing interest in Ethereum-based investment products driven by the expanding cryptocurrency sector.
Filed on February 12, Franklin Templeton’s application introduces the Franklin Ethereum ETF, tracking the price of Ether (ETH). The Bank of New York Mellon and Coinbase Custody Trust Company will serve as custodians for ether and cash assets, respectively. Approval would see the ETF listed and traded on the Cboe BZX Exchange, Inc.
What Do Market Experts Speculate?
Despite the growing anticipation of the approvals, not all believe the Ethereum ETFs are upon us yet. Variant Fund Chief Legal Officer Jake Chervinsky doubted the SEC would approve spot Ethereum ETFs in the U.S. before May. Despite the successful debut of spot Bitcoin ETFs in January, Chervinsky said that the complicated legal and regulatory landscape in Washington, D.C., might force the SEC to dismiss or withdraw the applications.
Due to Bitcoin’s unique position relative to other cryptocurrencies, which Gensler deems securities, SEC Chair Gary Gensler has said that Bitcoin ETF approval should not be taken as a wider adoption of cryptocurrency ETFs.
I’m not saying for certain that the spot ETH ETF won’t be approved by May 23.
I’m just saying that the legal issues and policy environment in DC make denial (or an SEC request to withdraw) more likely than general sentiment suggests.
“Blackrock always wins” is a lazy bull take.
— Jake Chervinsky (@jchervinsky) March 3, 2024
Updated List of Candidates
With the Ethereum ETF approval deadline approaching, a growing list of prominent companies, As early as September 2023, ARK 21Shares, Hashdex, and VanEck were among the companies who submitted applications. October 2023 saw Grayscale and Invesco Galaxy follow suit, and November 2023 saw the entry of iShares and Fidelity. The most recent applicant, Franklin Templeton, submitted its application in February 2024. These businesses are putting themselves in a position to benefit from the rising interest in Ethereum-based investment opportunities.
