Will Ethereum ETFs See the Light in May?

The United States Securities and Exchange Commission (SEC) has delayed its decision on Hashdex and ARK 21Shares' spot Ethereum exchange-traded funds (ETFs).

As the deadline approaches, Ethereum (ETH) enthusiasts will be eagerly watching these developments.

The chances of approval of the Ethereum ETF have decreased significantly

This extension, announced on Tuesday, March 19, extends the decision period until the end of May. Specifically, the SEC has set May 24 and May 30 as final decision dates for ARK 21Shares and Hashdex, respectively.

“The Commission finds it appropriate to set aside an extended period within which to issue an order to modify or approve the proposed rule to allow sufficient time to consider the issues raised therein,” the SEC said.

Following the SEC's announcement, the price of Ethereum fell by about 8%, which shows the sentiment of the market's regulatory decisions. Currently, Ethereum is trading around $3,100, indicating uncertainty regarding the approval of the ETF.

This delay affects several proposals for Ethereum ETFs, with notable entries from industry giants such as BlackRock, Grayscale and Fidelity. Recent sentiment has shifted, with analysts expressing skepticism about its approval.

Read more: Ethereum ETF explained: what it is and how it works

For example, ETF analyst James Seifert notes a worrying lack of engagement between the SEC and Ethereum ETF issuers. Compared to the active discussions surrounding Bitcoin ETFs, this lack of discussion has led to a pessimistic view of Ethereum ETFs.

“My cautious optimism for ETH ETFs has changed in recent months. We now believe these will finally be rejected for this round on May 23,” Seifert posted.

Moreover, the chances of approval have decreased, confidence in market forecasts is declining significantly. According to Polymarket, the probability of approval of an Ethereum ETF in May dropped to 24%, which is in stark contrast to the 75% probability following the SEC's approval of a spot Bitcoin ETF in January.

Amid these developments, Coinbase has emerged as a vocal proponent of Ethereum ETFs. Last month, Coinbase's Chief Legal Officer Paul Grewal published a detailed letter detailing his reasoning for approving the Ethereum ETF.

Read more: Ethereum (ETH) Price Prediction 2024/2025/2030

He emphasized the classification of Ethereum as a commodity, a view supported by the Commodity Futures Trading Commission (CFTC), and various SEC and court decisions. This argument is part of a broader effort to demonstrate Ethereum's market stability and viability as an ETF.