Approval of Ethereum-based exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) remains a matter of time, according to cryptocurrency exchange Coinbase analyst David Han.
"-While there is uncertainty regarding the timing of its approval [ETH-ETF], given the apparent silence from the SEC and issuers, we believe the existence of spot ETH-ETFs in the U.S. is a matter of time," he wrote.
According to the specialist, the main rationale used for approving bitcoin ETFs is applicable to the instrument based on the second largest cryptocurrency by market capitalization.
However, Han doubted the possibility of quick approval of Ethereum-ETFs with staking functionality. On May 10, ARK Invest and 21Shares removed the coin locking feature from their application for an exchange-traded fund based on the second largest cryptocurrency by market capitalization.
The analyst estimated the likelihood of approval of spot Ethereum-ETFs by the end of May at 30-40%.
"-We believe there is room for surprise on this issue. [...] Even if there is a rejection by the first deadline on May 23, 2024, the judicial process could overturn that decision. It is also worth noting that not all applications for spot ETH-ETFs necessarily have to be approved simultaneously," Han explained.
Earlier, lawyer Scott Johnsson stated that the SEC is examining grounds for rejection of spot Ethereum-ETF applications. According to him, one of the reasons could be assigning the asset the status of a security.
In April, Standard Chartered experts joined the camp of skeptics doubting the approval of spot ETH-ETFs by May 23. Analysts cited the lack of constructive dialogue between the regulator and issuers.
In May, the SEC postponed a decision on a similar product from Invesco and Galaxy. On April 23, the Commission extended the review period for Franklin Templeton's spot Ethereum-ETF application until June 11. Prior to this, the agency extended the review period for a similar application from BlackRock.
May will mark the deadline for proposals from VanEck and Grayscale.
Recall that Grayscale Investments withdrew its application for the creation of a futures ETF based on Ethereum. According to its CEO Michael Sonnenshein, the company will focus its efforts on converting ETHE into a spot exchange-traded fund.
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