SEC Ethereum ETF decision unlikely to be politically driven: Bernstein
The US securities regulator's decision to approve the spot Ether (ETH) exchange may not be a last-minute decision driven by political pressure, analysts at research and brokerage firm Bernstein said.
One of the themes behind the Securities and Exchange Commission's sudden vote in May to Ether ETFs is increased political pressure from Democrats to win over swing voters in this November's US elections.
However, that narrative began to look more credible after President Joe Biden repealed SEC Staff Accounting Bill (SAB) No. 121, Bernstein analysts Gautam Chugani and Makika Sapra wrote in a June 3 report.
According to the analysts, “the SEC knew it was in a corner on the ETH ETF” as it shares the same regulatory setup as the spot Bitcoin ETFs — including the same spot and futures linkage and multiple live ether futures on the Chicago Mercantile Exchange — indicating ether's commodity status.
“[It’s likely the] The SEC took a more pragmatic approach and avoided a legal battle.
“Whatever it is, it's a great result for the industry,” Bernstein analysts said.
Bernstein said he spoke with a few Ether ETF applicants who were “equally surprised” by the SEC's last-minute approval.
“No one is awaiting approval of an Ethereum ETF by the SEC. SEC staff's radio silence prior to the approval date has been interpreted as rejection. However, ETF issuers are required to file 19b-4s within 24 hours, 4 days prior to the approval date.”
Related: SEC's ETF Ruling Means ETH and ‘Many' Other Tokens Are Not Securities
Like most analysts, Bernstein expects Ether ETF liquidity to be much smaller than Bitcoin, although “there should be pent-up interest from the same participants as Bitcoin ETFs.”
The company expects to see positive price action in the effort to launch Ether.
On May 23, the SEC officially approved 19b-4 applications from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy and Bitwise to issue Ether ETFs.
The eight approved Ether ETF issuers are now waiting for their S-1 registration statements to be signed by the SEC, which could take between weeks and months.
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