Key Points
- Spot ether ETF approvals in the US remain uncertain due to legal and policy issues.
- Big firms like BlackRock, Fidelity and Franklin Templeton have applied for a spot ether ETF, but approval is not guaranteed.
Spot ether exchange-traded funds (ETFs) are facing an uncertain future in the United States. Jake Chervinsky, Chief Legal Officer at Variant Fund, suggests that the Security and Exchange Commission (SEC) is more likely to deny these ETFs than many believe.
Chervinsky stated that while he can’t confirm the spot ETH ETF won’t be approved by the May 23 deadline, the legal complexities and policy climate in Washington, DC make denial a more probable outcome.
Spot Bitcoin ETFs and Ether
After the successful launch of spot Bitcoin ETFs in the US in January, the focus has now shifted towards the potential approval of spot ether ETFs. However, SEC Chair Gary Gensler has clarified that the approval of spot Bitcoin ETFs was specific to that cryptocurrency and should not be interpreted as a precedent for other cryptocurrencies.
Major firms such as BlackRock, Fidelity and Franklin Templeton have submitted applications for a spot ether ETF in recent months. Despite BlackRock’s history of only one ETF denial, Chervinsky believes that the notion of ‘BlackRock always wins’ is an oversimplification.
Opinions on Ether ETFs
Eric Balchunas, a Bloomberg ETF analyst, estimated in January that there was a 70% chance of approval by May 23. This is the final deadline for the SEC to decide on a spot ether ETF application from Ark and 21Shares.
However, Nate Geraci, The ETF Store President, predicts that spot ether ETFs will be more significant than anticipated. He believes the demand for spot Bitcoin ETFs was severely underestimated, and considering that Ether holds a third of Bitcoin’s market cap, the potential for spot ether ETFs is considerable.
Anthony Sassano, an Ethereum educator and investor, also disagreed with Balchunas. He argued that comparing Bitcoin and Ether ETFs is not a fair comparison due to their different launch timings and market conditions.
Travis Kling, founder of Ikigai asset management, suggested that the approval of spot ether ETFs is more likely in August, coinciding with BlackRock’s deadline. Yet, Chervinsky doesn’t foresee any changes in law, policy, or politics that would make August more likely than May.
Finally, there is speculation that Grayscale may sue the SEC if it denies their application for a spot ether ETF, similar to how it converted its GBTC fund to a spot Bitcoin ETF. However, Chervinsky noted that the SEC has not shown much fear of losing in court, indicating a potential legal battle may not deter the agency’s decision.
