• BREAKING: SEC Delays Options Decision for BlackRock Ethereum Spot ETF
• The SEC has postponed its decision on BlackRock’s application for a spot Ethereum ETF product
• This is not investment advice
The SEC has postponed its decision on BlackRock‘s option application for its spot Ethereum ETF product. This development breaks with expectations and is significant for the crypto market.
Background
BlackRock filed an application with the SEC for a spot Ethereum exchange-traded fund (ETF). This ETF would have allowed investors to get direct exposure to Ethereum’s price movements.
The SEC has been slow and cautious regarding approvals of crypto ETFs. While it approved ProShares’ and Valkyrie’s Bitcoin futures ETFs last year, it has yet to approve a spot Bitcoin or Ethereum ETF.
The Delay
The SEC was expected to make a decision on BlackRock’s Ethereum ETF application by mid-September. However, in a new filing, it delayed this decision date to December 8, 2022.
The SEC stated it needed more time to consider BlackRock’s proposal. The delay wasn’t a surprise given the cautious stance of SEC Chair Gary Gensler.
This postponement indicates the SEC still has concerns regarding potential risks with a spot crypto ETF. It’s unwilling to rush ahead with approvals despite industry pressure.
Market Reaction
The crypto market reacted negatively to the delay. Ethereum’s price declined around 3% following the news.
Some industry participants expressed disappointment. They believe a spot ETF would provide a regulated channel for mainstream investors to access crypto. It would also demonstrate further maturation of the asset class.
On the flip side, others think this cautious approach is correct given crypto’s nascency. They want to avoid product approvals that could later cause investor harm if rescinded.
What’s Next
All eyes will turn to December when the SEC makes its final decision on BlackRock’s ETF. Another delay seems unlikely at that point.
Approval would signal a major shift in the SEC’s thinking. It would pave the way for further spot crypto ETFs. Rejection would maintain the status quo of futures-based products only.
The market will watch closely for the SEC’s decision as it weighs heavily on investor access to cryptocurrencies. This access could expand or face continued barriers depending on the ruling.
