In an unexpected turn of events, the joint Ethereum Spot ETF application from Invesco and Galaxy faces a delay as the Securities and Exchange Commission [SEC] has decided to postpone its decision until February 6, 2024. The SEC, in a notice dated December 13, has opted for an extended evaluation period to determine whether to approve or disapprove of a proposed rule change enabling the Cboe BZX Exchange to list and trade shares of the Invesco Galaxy Ethereum ETF.
The original 45-day timeframe, starting from the notice’s publication on December 23, 2023, is now being prolonged, with the new decision date set for February 6, 2024, as outlined in the notice. In September of the current year, Invesco, a major asset management firm, collaborated with Mike Novogratz’s Galaxy Digital to submit the Ethereum spot ETF application to the SEC. The application involved Galaxy Digital Funds serving as an execution agent for the ETF, facilitating the buying and selling of Ethereum. Notably, this Ethereum application followed a joint Bitcoin product application in June.
The ripple effect of this delay is felt across various spot crypto ETF applications, underscoring the SEC’s careful approach. The SEC attributes the delay to a thorough consideration of the risks and implications associated with approving a spot Ether ETF.
Grayscale Ethereum ETF
In a parallel development, the SEC has also extended the timeline for deciding on the Grayscale Ethereum Trust’s spot ETF application by 45 days, with the new decision date set for January 25, 2024. Grayscale Investments, the entity behind the Grayscale Ethereum Trust, applied to the SEC in October 2023, seeking approval to convert its trust into a spot ETF. Such an ETF would track the price of ETH, allowing investors to gain exposure to ETH without direct cryptocurrency acquisition and storage.
It’s worth noting that the SEC has yet to greenlight any spot for Ether or Bitcoin ETFs, consistently delaying decisions on all applications received. The delays stem from the SEC’s concerns about potential market manipulation and investor protection issues associated with spot ETFs, underscoring the regulatory body’s cautious stance in this evolving landscape.