For those eagerly anticipating a potential Ethereum futures ETF from Grayscale, the waiting game continues. The SEC decided to delay its ruling on whether to approve the investment product until May 30th in a filing published on Friday.
The regulatory agency offered up the typical excuse of needing more time to fully evaluate the proposal and any issues surrounding it. The SEC has had months already to review this straightforward application for an Ethereum futures ETF. Their credibility is quickly eroding with these endless delay tactics. Grayscale, the largest crypto asset manager, originally filed for an Ethereum futures ETF back in September 2023 under the ticker “ETH.”
Gary Gensler and Co. keep preaching about protecting investors and promoting transparency. But how can they justify delaying fully regulated investment products holding assets with a huge market cap?
Analyst Insights on Ethereum ETF Approval
Most analysts now consider a May approval unlikely after the SEC subpoenaed major exchanges and has gone radio silent with applicants. Alex Thorn from Galaxy Digital cited the SEC’s subpoena of major crypto exchanges and lack of communication with applicants as concerning signs. There are also lingering questions about whether Ethereum’s 2014 initial coin offering constituted an unregistered securities sale.
Coinbase’s top lawyer Paul Grewal rightly called out this potential hypocrisy, noting the SEC itself has repeatedly classified Ethereum as a commodity aligned with court precedents. The agency would have an extremely tough time justifying a complete reversal without solid reasoning.
Despite the clouded outlook, asset managers like Bitwise believe further delays could ultimately benefit a spot Ethereum ETF. Matt Hougan, Bitwise’s Chief Investment Officer, said traditional finance needs more time to digest Bitcoin ETFs before a new Ethereum product to maximize acceptance and inflows. But investors have already been more than patient enough.
At this point, the SEC has backed itself into a corner where rejecting this ETF could spark a firestorm of lawsuits and backlash. An approval would avoid that scenario while finally following their own advice of promoting innovation and fair markets. However, which path they choose in two months, the credible move is obvious to any impartial observer.
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