While the possibility of a spot Ethereum exchange-traded fund (ETF) getting approval from the US Securities and Exchange Commission is discussed, an ETF expert continues to be largely pessimistic. On March 26, Bloomberg Senior ETF Analyst Eric Balchunas shared that he believes the likelihood of an Ethereum ETF application being approved is a very pessimistic 25%.
Current Status of the Ethereum ETF Process
Balchunas, in a post on social media platform X, pointed out that the lack of participation seems intentional against delays and mentioned that there are no positive signs anywhere we look. The famous expert added that the situation does not look good in this process.
On the other side of the discussion, Grayscale’s Chief Legal Officer Craig Salm shared his belief on the social media platform that the SEC‘s lack of engagement is neither a positive nor a negative signal and referred to the idea that many details requiring engagement had already been determined through the spot Bitcoin ETF approval process. The prominent figure shared the following statements:
“In the recent months leading to the Bitcoin ETF approval, Grayscale and others received positive and constructive interaction from the SEC. We had thoughtful conversations and discussed the fine details of creation/redemption procedures, cash and kind, etc. All these issues have been resolved and are the same when spot Bitcoin is compared to Ethereum. The only difference is that the ETF fund holds Ethereum instead of Bitcoin. Thus, in many ways, the SEC has already been involved, and issuers have less to engage this time.”
SEC’s Move on Ethereum
Although the SEC has not necessarily been involved with spot Ethereum ETF applications, the agency is reportedly in an alleged campaign to label Ethereum as a security. It has been reported that the regulator issued subpoenas to crypto firms regarding their relationships with the Ethereum Foundation.
These recent actions by the SEC indicate to Alex Thorn, the head of firm-wide research at Galaxy Digital, that approval for spot Ethereum exchange-traded funds looks extremely low as of May. Many experts and analysts argue that the SEC’s move is intended to prolong the process for spot Ethereum ETF applications.
