SEC Delays ETH ETF Decision Until March Awaiting Credibility
The Securities and Exchange Commission (SEC) has delayed a decision on Fidelity's proposal until March 5.
The delay will give the regulator more time to consider the issues raised by such ETFs as it weighs approval. This expected delay pushes the timeline for a final decision to the end of May, when the SEC faces a deadline to approve or deny VanEck's Ethereum ETF proposal.
TLDR
Considering the issues raised by the SEC, the decision on Fidelity's proposed spot Ethereum ETF was expected to be delayed until March 5. Decisions could come at the end of May, when the SEC has to decide on VanEck's Ethereum ETF proposal. Fidelity and BlackRock joined the competition for the spot. Opinion is divided on whether the SEC will finally approve an Ethereum ETF after the approval of futures-based ETFs.
Fidelity's proposed Ethereum fund, if approved, would allow investing directly in the cryptocurrency instead of futures contracts. It aims to build on last year's court ruling that said the SEC did not provide a clear rationale for rejecting spot crypto ETFs by allowing futures-based products. The delay suggests the regulator is cautious, however, even after approving multiple bitcoin ETFs last week.
Fidelity #ethereum ETF is just now late. It is fully protected. The most important dates in my view are at the end of May.
— James Seyff (@JSeyff) January 18, 2024
With the fate of Ethereum's ETF approval still uncertain, financial giants Fidelity and BlackRock announced in 2016 By the end of 2022, they have joined the competition by registering their ideas. This comes shortly after the SEC greenlighted Ether Futures to begin trading. Supporters see the approval of those derivatives as a positive sign that the regulator is not classifying ether as a security for strict regulation.
Despite recent wins for spot bitcoin funds, opinion is divided on whether Ethereum ETFs will ultimately gain approval. Some analysts predict a strong 70% chance of a May deadline, while others say the SEC still seems hostile to crypto and may separate ether from bitcoin. In particular, the regulator's view on whether Ether should be classified as a security or a commodity will be critical.
As debates over ether ETFs continue, ideas for leveraged and reverse bitcoin currencies are piling up quickly. Direxion filed for 5 bitcoin ETFs in mid-January, joining REX Shares and ProShares, which previously filed for 11 funds backed by 2023. If approved, leveraged bitcoin ETFs could outnumber regular ones. This flood of documents shows the appetite for crypto investment vehicles that has been rejected by the SEC for years.
T-Rex files 6 leveraged and inverse Bitcoin ETFs
T-Rex 1.5X Reverse Spot Bitcoin Daily Target ETFT-Rex 1.5X Long Spot Bitcoin Daily Target ETFT-Rex 1.75X Reverse Spot Bitcoin Daily Target ETFT-Rex 1.75X Long Spot Bitcoin Daily Target ETFT-Rex 2X Reverse Spot Bitcoin Daily… Picture .twitter.com/eLFTiS1Gq9
— ETF Hearsay by Henry Jim (@ETFhearsay) January 3, 2024
While leveraged crypto ETF approvals may be more visible in light of recent bitcoin decisions, spot ether funds face a tougher path with complex implications around cryptocurrency allocations. The next few months will be crucial in determining the regulatory position. For now, there is also uncertainty as high-pressure institutions line up to increase investor interest if Ethereum ETF hurdles are lifted.
