The cryptocurrency world is on edge as the U.S. Securities and Exchange Commission (SEC) is expected to make pivotal decisions regarding spot Ethereum (ETH) exchange-traded funds (ETFs) this week. The regulatory body will either approve or reject several high-profile applications, starting with VanEck’s proposal on May 23, followed by the joint application from ARK Invest, led by Cathie Wood, and 21Shares on May 24.
The roster of applicants hoping to launch a spot ETH ETF includes financial giants such as BlackRock, Fidelity, Bitwise, Galaxy Digital, Franklin Templeton, and Hashdex. Despite the enthusiasm from these prominent players, industry insiders widely anticipate that the SEC will reject these applications. The primary reason cited is the apparent lack of meaningful dialogue between the SEC and the ETF issuers.
Experts Question SEC’s Stance on Ethereum Data Requirements
Industry experts are keenly interested in the rationale the SEC will provide for any rejections. Bitwise’s Chief Investment Officer, Matt Hougan, speculates that the SEC might point to insufficient data as a key reason. On the other hand, legal analysts like Scott Johnsson suggest the SEC could classify the underlying asset—Ethereum itself—as an unregistered security.
These decisions come at a crucial time for Ethereum. On May 16, the flagship altcoin hit a new yearly low against Bitcoin, trading at 0.044 BTC. Since then, ETH has rebounded by approximately 6%, yet bearish sentiment prevails due to the looming ETF verdict. As of now, Ethereum is trading at $3,104, according to CoinGecko data.
The implications of the SEC’s decisions extend beyond just the applicants. Approval of a spot Ethereum ETF would mark a significant milestone for the cryptocurrency industry, potentially leading to increased institutional investment and greater mainstream acceptance. Conversely, another round of rejections could stymie market sentiment and lead to further regulatory scrutiny.
For now, all eyes are on the SEC’s upcoming announcements. Whether the agency opts to approve or reject these spot Ethereum ETFs, the decisions will undeniably influence the future trajectory of Ethereum and the broader cryptocurrency market.