The U.S. Securities and Exchange Commission (SEC) has hit the pause button on making any decisions regarding ether exchange-traded fund applications from financial giants BlackRock and Fidelity. This move has sparked a period of public commentary on both applications.
The SEC is seeking public opinion on whether they concur with Fidelity, BlackRock, Cboe, and Nasdaq that the rationale used to approve the recent spot bitcoin ETFs could also be applied to ETFs holding Ethereum’s ether. The regulatory body is also interested in understanding the potential susceptibility of spot ether ETFs to manipulation and the similarities between spot and futures ether exchange-traded products.
James Seyffart, an analyst with Bloomberg Intelligence, suggests that we should anticipate further delays in the coming weeks, with May 23 being a critical date to look out for. By this date, the SEC should have reached a final decision on the applications. However, other indicators might shed light on the SEC’s perspective on these applications over the next month.
If the applicants begin to update their documentation in a way that suggests they are incorporating direct feedback from the regulator, similar to the exchanges that occurred in the weeks leading up to the approval of bitcoin ETFs in January, it could signal a more optimistic outlook.
While issuers have already submitted some updates over the past few weeks, many of these appear to be reflections of lessons learned from the bitcoin ETF application process, rather than responses to specific guidance or feedback from the SEC.
Seyffart noted, “We’ve observed a few updates over the past 30 days. Some issuers have made changes, but as far as I can tell, most of the updates have been efforts to align these Ethereum filings with the insights gained during the bitcoin ETF process. There hasn’t been anything updated that is specific to ETH.” He added that while there hasn’t been any update that definitively indicates the SEC is in discussions with any of these parties about a theory, the SEC is known for its discretion and its policy of not discussing such matters.
