SEC Plays Delay Game Again: Pushes Back Spot ETH ETF Proposals

SEC's repeated delays in deciding on spot Ether ETF proposals from major players like BlackRock and Fidelity have increased anticipation amidst market adjustments.

SEC Delays Decision Again

The Securities and Exchange Commission (SEC) has once again postponed its decision on spot Ether exchange-traded fund (ETF) proposals, extending the waiting game for market participants. In filings made on March 4, the SEC announced that it would delay its verdict on applications from financial giants BlackRock and Fidelity regarding their spot Ether ETFs.

Familiar Tactics

This delay echoes previous postponements by the SEC, reminiscent of its strategy to prolong decision-making processes. BlackRock initially submitted its application for the iShares Ethereum Trust to the SEC in November of the preceding year. The regulatory body had previously deferred its decision on BlackRock's and Fidelity's Ether ETF proposals in January, shortly after approving several spot Bitcoin ETFs.

Analyst Highlights Final Deadline

Market observers and ETF analysts had long predicted the SEC's tactic of delaying a definitive ruling until a critical deadline approaches. Bloomberg ETF analyst James Seyffart highlighted May 23 as a significant date to watch as it marks the 240-day window within which the SEC must decide on proposals from other ETF contenders like VanEck and Ark 21Shares.

Seyffart had previously estimated the likelihood of approval for spot Ether ETFs to be around 60% by May. He underscored the significance of the May deadline, suggesting that the SEC might synchronize its decision-making process to coincide with this date.

ETF Amendments

In response to the ongoing delays, other contenders seeking approval for spot ETH ETFs have adjusted their proposals, including amendments of language related to staking. Last month, Ark 21Shares made adjustments to its S-1 filing for the proposed fund by incorporating staking-related language within brackets. 

Additionally, February witnessed the entry of Franklin Templeton into the realm of Ether ETF hopefuls, notable for its inclusion of staking-related language, albeit without the use of brackets, as seen in Ark 21Shares' filing.

Market Response

Despite the SEC's decision to delay once again, the price of Ether has continued to surge, buoyed by optimistic market sentiment regarding potential ETF approval. Over the past month, Ether has witnessed a substantial increase of 56.7%, unaffected by the recent delay announcement. At the time of reporting, Ether is trading at $3,754, marking a 13% increase for the week.

While the prospect of a spot Ether ETF approval remains promising, some industry participants remain cautious. Comparisons to the monumental success of spot Bitcoin ETFs, exemplified by BlackRock's iShares Bitcoin ETF amassing $10 billion in assets under management, suggest that the impact of spot Ether ETFs may not be as substantial.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.