- SEC is soliciting public comments for three proposed spot Ethereum ETFs – Fidelity Ethereum Fund, Grayscale Ethereum Trust, and Bitwise Ethereum Trust
- Optimism for SEC’s approval of these spot Ethereum ETFs has decreased
- Bloomberg analysts believe the SEC’s silence on the matter is not a good sign for approval
The Securities and Exchange Commission (SEC) is requesting public comments on proposed spot Ethereum exchange-traded funds (ETFs) from Grayscale, Bitwise, and Fidelity. This comes as optimism around SEC approval of these products has decreased in recent weeks.
SEC Filings Request Public Feedback
On Tuesday, the SEC published filings requesting public comments on the following proposed spot Ethereum ETFs:
- Fidelity Ethereum ETF
- Grayscale Ethereum Trust ETF
- Bitwise Ethereum Trust ETF
“The Commission is publishing this notice to solicit comments on the proposed rule change as modified by Amendment No. 1 from interested persons,” the SEC said regarding the Bitwise filing.
Comments are due within 21 days for all three filings.
Dwindling Hopes for SEC Approval
Initially, analysts were optimistic the SEC would approve spot Ethereum ETFs in the first half of 2024. However, that optimism has faded in recent weeks.
Eric Balchunas, a senior ETF analyst at Bloomberg, has lowered his estimate for chances of approval by May from 70% down to 30%.
Fellow Bloomberg analyst James Seyffart also weighed in, saying the filings don’t indicate any change in thinking by the SEC. “Silence from the SEC isn’t a good thing here,” he said.
The SEC has yet to approve any spot cryptocurrency ETFs, despite multiple proposals from various asset managers over the past few years. The agency has cited concerns around manipulation, liquidity, and custody as reasons for rejecting past applications.
Conclusion
While the SEC is at least opening up the new Ethereum ETF proposals for public comment, analysts believe the chances for swift approval remain slim. The agency is likely to take a very cautious approach when it comes to allowing direct spot cryptocurrency exposure for retail investors.
