The wait for an Ethereum exchange-traded fund (ETF) in the U.S. continues. The Securities and Exchange Commission (SEC) announced on May 6th, 2024, that it had extended its review period for the Invesco Galaxy Ethereum ETF by 60 days. This means a decision won’t be reached until July 5th, 2024.
This latest delay aligns with recent analyst predictions of a prolonged review process. The SEC has been carefully examining several Ethereum ETFs proposals, including applications from Grayscale, Franklin Templeton, VanEck, and BlackRock. In February, the commission requested public comment on the Invesco Galaxy ETF, further extending the timeline.
The postponement has dampened market enthusiasm for Ethereum ETFs. Bloomberg ETF analyst Eric Balchunas significantly lowered his approval probability for such products in late May from around 70% to 25%. This shift reflects growing concerns about the SEC’s stance on Ethereum ETFs.
The regulatory landscape surrounding Ethereum’s classification remains ambiguous. This ambiguity has intensified the SEC’s scrutiny, as evidenced by the recent extension of the deadline for the Franklin Templeton Ethereum ETF to June 10th, 2024. Analysts anticipate potential rejections for these proposals in May due to the unresolved classification issue.
Regulatory Uncertainty Hinders Ethereum ETFs
The SEC’s prudent approach has cast doubt on the prospects of a swift Ethereum-based ETF launch. Despite the approval of a spot Bitcoin ETF earlier this year, the regulatory landscape for crypto ETFs remains unpredictable. This cautious stance reflects the broader lack of clarity regarding the classification and regulation of Ether and other crypto assets.
While the Invesco Galaxy ETF decision is now pushed to July, investors are closely monitoring the May 23rd deadline for VanEck’s Ether ETF application. Any updates on that front could provide further insights into the SEC’s overall approach to Ethereum ETFs.
The extended review periods underline the complexities involved in regulating the evolving crypto market. The SEC’s final decisions on these ETF proposals will significantly impact investor access to Ethereum and potentially influence the broader trajectory of crypto asset regulation in the U.S.
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