As expected, SEC decision on Fidelity’s Ethereum ETF postponed


January 19, 2024 1:07 p.m. UTC+1
| 2 min read

SEC pushes back deadline for approval of Fidelity’s Ethereum ETF.

SEC pushes back decision on Ethereum ETFs

The SEC announced this January 18 push back its approval deadline 45-day Ethereum ETFs. Fidelity’s request could only be finally validated next June.

As a reminder, the initial deadline was set until May 23. Furthermore, the SEC had already operated in the same way with the Bitcoin ETFs approved a little over a week ago. They also pushed back the deadline by 45 days, finally validating them on the last day of this period.

According to the ETF expert, James Seyffart, this additional delay was “completely expected” and that a significant date to find out more would not be not before the end of May.

According to Seyffart, Ethereum ETFs have 70% chance of being approved. In contrast, JP Morgan analysts estimate a probability of SEC approval at 50%.

Why Ethereum ETFs are more complicated


James Seyffart predicted approval for 90% for Bitcoin ETFs. So why does he see a lower probability on the Ether side?

Quite simply because the SEC would then have to recognize Ethereum as not being a security. Indeed, an approval would implicitly demonstrate the consideration of ETH as neither a commodity nor a security.

However, according to Joe Carlasareapproval of Bitcoin ETFs “virtually guarantees approval of an ETH ETF.”

“In my opinion, the SEC’s analysis in its approval of spot Bitcoin ETFs virtually guarantees approval of a spot ETH ETF for the following reasons:

  • ETH futures are already trading on the CME.

  • The SEC has already approved ETH futures ETFs.

  • The CME has identical supervisory sharing agreements for BTC and ETH futures.

  • The correlation between ETH futures and spot is over 90% (just like BTC). This is the main reason why they approved the BTC spot ETF. Therefore, it would be arbitrary and capricious to treat futures and spot markets differently (see Grayscale v SEC)

  • The SEC doesn’t like to pick winners. I think they would prefer two digital asset spot ETFs rather than just one.”he writes.

Meanwhile, the Bitcoin ETF continue to flood into the crypto industry. Indeed, five new requests for leveraged Bitcoin ETFs have been filed with the SEC.

“Leveraged Bitcoin ETFs Could Soon Outnumber Long Positions, I’m Pretty Sure That Never Happened,” answers Eric Balchunas on X.

Source: CoinTeleGraph

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