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Ethereum ETF approval in limbo as SEC delays BlackRock and Fidelity filings

SEC Delays Decision on Ethereum ETFs Amid Bitcoin ETF Boom: What's Next for Crypto Investors?

Mar 05, 2024
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SEC's latest delay on Ethereum ETFs raises questions about potential approval, contrasts with bitcoin ETF success.

The US Securities and Exchange Commission (SEC) has once again postponed its verdict on whether to approve or disapprove the Ethereum exchange-traded funds (ETFs) proposed by BlackRock and Fidelity, following the recent greenlighting of several high-profile bitcoin ETFs.

On 4 March, the SEC announced the postponement of decisions on BlackRock's iShares Ethereum Trust and Fidelity's Ethereum Fund.BlackRock's initial application, submitted in November, had been delayed by two months, with the regulator citing the need for additional review time. Although a new deadline for a decision had been set for 10 March, that date has been abandoned, according to the agency's filing. The SEC has also delayed decisions on several other spot Ethereum ETF applications, including those from Fidelity, Invesco and Galaxy Digital.

The SEC's latest delay wasn't unexpected, as market observers and ETF analysts have long expected the agency to make an approval or denial decision closer to the first deadline in May.

Bloomberg ETF analyst James Seyffart predicts that these delays could continue until 23 May, the final deadline for applications from VanEck and Cathie Wood's Ark Invest. These specific applications, one of which dates back to 2021 for Fidelity, were originally filed on 6 September 2023. The SEC postponed its decisions on these applications two weeks after they were filed.

Interest in Ethereum spot ETFs is growing, especially as bitcoin nears a new all-time high. The optimism surrounding BTC is largely fuelled by the success of spot bitcoin ETFs, which saw inflows of $1.84 billion in one week. Expectations of a similar trend for Ethereum, which recently hit its highest price in over a year, are driving significant demand.

However, not all analysts are convinced that a spot Ethereum ETF will replicate the performance of its bitcoin counterparts. Bloomberg ETF analyst Eric Balchunas hinted that he and Seyffart would soon publish formal odds on an Ethereum ETF being approved, but described the unapproved ETH funds as "small potatoes" compared to bitcoin-based funds. The price of Ethereum has mirrored the broader market's optimism over a potential approval, with a 62% surge over the past month. This upward trajectory continued even after the SEC announced the delay. According to the latest data from CoinGecko, ETH is trading at $3,691.84, up 4.9% in the last 24 hours.

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