Professional cryptocurrency journalist Eleanor Terrett shared with Fox Business Media interesting news about the U.S. Securities and Exchange Commission (SEC) possibly approving an Ethereum (ETH) spot exchange-traded fund (ETF) in May.
According to Terrett, optimism for the approval of an Ethereum spot ETF by at least May 23 is waning.
Discussions about an Ethereum spot ETF have become one-sided.
Terrett mentioned that, citing sources familiar with the matter, recent discussions on approving an Ethereum spot fund have become one-sided.
She said that while potential Ethereum spot ETF issuers have tried to convince SEC staff to start the approval process, the securities regulator has not made any proactive efforts like it did with Bitcoin spot funds.
Reasons behind the SEC’s actions
The professional cryptocurrency journalist outlined two reasons why the SEC was taking a light-hearted approach to approving an Ethereum spot ETF.
According to Terrett, SEC Chairman Gary Gensler believes he has appeased the cryptocurrency industry by approving multiple Bitcoin ETFs. Recall that Gensler’s vote was key to the birth of a Bitcoin spot ETF in the United States.
Crypto Basic reported in January that Gensler, Mark Uyeda, and Hester Peirce were the three commissioners who voted in favor of approving a Bitcoin spot ETF.
Additionally, Terrett pointed out that another reason for the SEC’s recent behavior is that anti-crypto politicians, including Senator Elizabeth Warren, have been opposing the approval of ETH-based products.
Terrett noted that politicians like Warren were angry about the SEC approving a Bitcoin spot ETF. Therefore, they have been working hard to prevent Ethereum from being approved again.
With two months to go until May 23, one of the sources told Terrett that the SEC needs to start processing multiple Ethereum spot ETF applications as soon as possible in order to give the products a chance to be approved before May 23.
Bloomberg analysts share similar views
It is worth noting that Eric Balchunas, a well-known ETF analyst, also expressed a similar view last week. Balchunas, who had predicted that the SEC would approve at least one Ethereum ETF application by May 2024, is now pessimistic about this prediction.
He mentioned this in response to a meeting between SEC staff and Coinbase representatives on March 6 regarding Grayscale’s application to convert its Ethereum Trust (ETHE) into a spot Ethereum ETF.
It should be mentioned that Grayscale is using Coinbase as the custodian for its potential spot Ethereum fund.
Balchunas said in comments that he would have viewed the SEC and Coinbase meeting as a good sign. However, Balchunas stressed that the SEC’s refusal to comment on Ethereum spot ETF issuers does not seem to be a positive sign.
Another reason the analyst is pessimistic about an Ethereum spot ETF is that the agency has not suffered any court defeats in approving Ethereum-based funds. Recall that the SEC was motivated to approve all Bitcoin spot ETFs following its defeat against Grayscale Investments in August.
Despite reduced optimism regarding the approval of an Ethereum spot ETF by May 23, Ethereum prices continue to record significant growth. The second-ranked cryptocurrency recently broke through the $4,000 resistance and surged to a 24-hour high of $4,030. Currently, ETH is trading at $4,008, having gained 13.5% in the past seven days.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may contain the personal opinions of the author and do not necessarily reflect the views of The Crypto Basic. Readers are encouraged to perform adequate research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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