Spot Ethereum ETF Decision Delayed Again by SEC: More Delays Expected

• The SEC has extended its decision deadline for a proposed Invesco and Galaxy Digital Ethereum ETF, part of the standard ETF approval process. This delay does not affect the broader timeline for an ETH ETF decision expected in May.
• The SEC has instituted proceedings and requested comments on issues like fraud prevention and investor protection for the proposed Invesco and Galaxy ETF. Comments are due within 21 days.
• While this specific ETH ETF proposal was delayed, the key deadline remains May 23rd when the SEC must decide on a VanEck ETF application. The May decision will likely impact multiple proposed Ethereum ETFs despite differing deadlines.

The U.S. Securities and Exchange Commission (SEC) has extended its decision deadline for a proposed rule change that would allow Cboe BZX to list an Ethereum ETF from asset managers Invesco and Galaxy Digital. This delay, announced on February 6th, is part of the standard ETF approval process and does not affect the broader timeline for an ETH ETF decision expected in May.

SEC Institutes Proceedings for Invesco and Galaxy ETH ETF

The proposed rule change to list and trade the Invesco Galaxy Ethereum ETF was initially published for comment on November 8, 2023. On December 13th, the SEC designated a longer period to potentially approve, disapprove, or institute proceedings around the ETF.

In its latest filing, the SEC has chosen to institute proceedings, requesting comments on issues like fraud prevention, market manipulation, and investor protections. The SEC says comments should be submitted within 21 days of Federal Register publication, and rebuttals within 35 days.

No Deadline Changes Despite Delay

While this specific ETH ETF proposal has been delayed, the timeline for a broader ETF decision remains May 23rd according to ETF analyst James Seyffart. He expects more delays in the coming months for other filings, but says the May VanEck deadline is the key date.

The SEC has already delayed ETFs from Fidelity, BlackRock, Grayscale and others, but again, this is part of the standard approval process. Multiple ETFs will likely be decided together despite differing deadlines.

Unclear If SEC Will Approve ETH ETF in May

It remains uncertain whether the SEC will actually approve a spot Ethereum ETF in May. Prediction markets put the odds of approval by May 31st at around 43%. Analyst estimates range from 50% to 60%. At least one research group believes approval will not come until 2025 or 2026. Crypto investors anxiously await the SEC’s decision, which would be a major milestone for Ethereum legitimacy.