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Tuesday, May 28, 2024

SEC Delays Spot Ethereum ETF Decision From BlackRock and Fidelity

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The United States Securities and Exchange Commission (SEC) has once more postponed its decision to approve or deny the applications for spot Ethereum exchange-traded funds (ETFs) submitted by BlackRock and Fidelity.

The latest delay comes weeks after the agency greenlighted several Bitcoin ETFs that have since gained massive traction.

SEC Delays Decision on Ethereum ETFs

On March 4, the SEC declared it would postpone the decision for BlackRock’s iShares Ethereum Trust and Fidelity’s Ethereum Fund.

BlackRock’s initial application was lodged in November, with the federal regulator postponing its decision two months later, citing the need for additional time to review. Although a new decision deadline was set for March 10, this date has been discarded, as revealed in the agency filing.

Moreover, the SEC has postponed its decisions on several other applications for spot Ethereum ETFs, including those from Fidelity, Invesco, and Galaxy Digital.

Bloomberg ETF analyst James Seyffart has forecasted that these delays could continue until May 23, the ultimate deadline for the applications submitted by VanEck and Cathie Wood’s Ark Invest.

These particular applications, one of which dates back to 2021 for Fidelity, were initially submitted on September 6, 2023. The SEC first delayed its decisions on these applications two weeks after submission.

Spot Ethereum ETFs Draw Attention Amid Bitcoin’s Surge

The SEC’s recent postponement wasn’t unexpected as market observers and ETF analysts have long anticipated that the agency would decide on approval or denial only as the first conclusive deadline in May approaches.

The growing interest in spot Ethereum ETFs is becoming more pronounced as Bitcoin approaches a new all-time high. The enthusiasm around BTC is largely fueled by the success of spot Bitcoin ETFs, which recorded $1.84 billion in inflows within a week. The anticipation of a similar trend for Ethereum, which has recently achieved its highest price in over a year, is generating high demand.

However, not all analysts are convinced that a spot Ethereum ETF will mirror the performance of its Bitcoin counterparts. Bloomberg ETF analyst Eric Balchunas mentioned that he and Seyffart would soon publish formal odds on an Ethereum ETF approval but referred to the yet-unapproved ETH funds as “small potatoes” compared to Bitcoin-based funds.

Ethereum’s price has been mirroring the broader market’s optimism over potential approval, with a 62% increase over the past month. This rise continued even after the SEC’s announcement of the delay. As of the latest CoinGecko data, ETH is trading at $3,691.84, marking a 4.9% increase over the last 24 hours.

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