In mid-January, spot Bitcoin ETFs were approved which resulted in a staggering 60% surge in crypto markets. This surge added a trillion dollars to the total capitalization. While Bitcoin reached a new all-time high during this period, Ethereum struggled to surpass the $4,000 level decisively.
Fox Business correspondent Eleanor Terrett recently reported that optimism surrounding the approval of spot Ethereum ETFs by the U.S. Securities and Exchange Commission by May 23rd is fading. Conversations with individuals familiar with the matter revealed that recent meetings have been one-sided. Issuers and custodians have been pushing SEC staff to move the process forward, but engagement has been lacking compared to the BTC spot ETF applications.
Anti-crypto politicians like Elizabeth Warren are already expressing discontent with the SEC’s approval of Bitcoin ETFs and are rallying against a similar approval for Ethereum. It has been speculated that SEC Chair Gary Gensler believes the industry has already been appeased with the Bitcoin ETF approvals.
ETF Store President Nate Geraci has highlighted the SEC’s argument that Ethereum futures are not highly correlated with spot markets. While this is not an indication that spot Ethereum ETFs will be approved, Geraci finds it hard to believe that denial would be justified based on lack of correlation. The recent Grayscale court victory has been identified as a potential reason for approval. The SEC is faced with either reversing years of implicit acceptance of Ether as a commodity or potentially facing new lawsuits from issuers.
Bloomberg ETF analyst Eric Balchunas suggested that Gary Gensler’s previous decisions regarding Bitcoin ETFs may influence the approval process for Ethereum ETFs. The current situation presents a significant challenge for the SEC, as the decision on spot Ethereum ETFs may have broader implications for the crypto industry as a whole.
The potential approval of spot Ethereum ETFs by the SEC is facing various challenges and uncertainties. The outcome of this decision will not only impact Ethereum but also have implications for the wider cryptocurrency market. Stakeholders are closely monitoring developments and preparing for potential outcomes as the SEC navigates through these complex issues.