Spot Ethereum ETF approval delayed again, this time with an additional roadblock
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Spot Ethereum ETF approval delayed again, this time with an additional roadblock
Be prepared for the different narratives between Ethereum and Bitcoin.
Navigating Web3 tides with focused insightsBy Asher, Odaily Planet Daily
On March 13, Ethereum successfully completed the Dencun upgrade, ushering in a new era of low-fee L2 transactions. However, Ethereum's price did not exhibit an independent strong rally, largely mirroring the performance of other major cryptocurrencies. In comparison with its "two neighboring chains," some in the community jokingly remarked: "Congratulations to SOL and BNB on completing the Dencun upgrade."
Adding to the frustration of "Ethereum maximalists," in the early hours today, the U.S. SEC postponed its decision on VanEck’s spot Ethereum ETF, stating it will decide whether to approve the application by May 23. Meanwhile, rumors suggest that the Ethereum Foundation may be under official investigation by a national authority—an action some speculate could be part of coordinated efforts by the U.S. SEC against Ethereum.
Under the combined impact of these two developments, Ethereum’s price briefly dropped below $3,100, hitting a low of $3,055, with a maximum intraday decline exceeding 5%. (Odaily Planet Daily note: ETH has since rebounded strongly along with the broader market and is currently trading at $3,529 USDT.)
U.S. SEC Delays VanEck Spot Ethereum ETF Decision
Although most market participants had already anticipated the delay, the official postponement still significantly impacted market sentiment. According to prediction platform Polymarket’s “public opinion” data, the likelihood of approval for a spot Ethereum ETF continues to decline, now standing at just 22% by May 31.
Probability of Spot Ethereum ETF Approval
Will the ETH spot ETF face further delays or even outright rejection? Below, Odaily Planet Daily compiles insights from crypto industry practitioners and KOLs.
James Seyffart, ETF Analyst at Bloomberg:
There is growing concern about the short-term prospects for a spot Ethereum ETF. The U.S. SEC has not engaged with issuers on Ethereum-specific issues, which stands in stark contrast to its approach during the Bitcoin ETF reviews last fall. VanEck, Ark/21 Shares, and Grayscale are all expected to face delays within the next 12 days. Ultimately, I expect the U.S. SEC to reject the spot Ethereum ETF applications on May 23, 2024.
Eric Balchunas, ETF Analyst at Bloomberg:
The chances of approving a spot Ethereum ETF continue to shrink, having dropped from 70% to just 25%. While optimism remains low, I believe the SEC will only delay rather than outright reject the application by May 23. Nevertheless, I still believe approval is inevitable in the long run.
Paul Grewal, Chief Legal Officer at Coinbase:
Ethereum has always been critical to the crypto space. It is a commodity, not a security—a stance the SEC itself has maintained for years. There is no sufficient justification for the SEC to reject spot Ethereum ETF applications.
Eleanor Terrett, Reporter at FOX Business:
Optimism around SEC approval of a spot Ethereum ETF by May 23 is fading. Based on conversations with informed sources, recent meetings have been overwhelmingly one-sided, with issuers and custodians actively pushing SEC staff to advance the process, but without meaningful engagement from SEC officials—unlike their responsive interactions during the Bitcoin spot ETF review process.
Crypto KOL DCinvestor:
Although the delay in the spot Ethereum ETF caused ETH’s price to drop, the swift and strong rebound suggests institutional buying is underway. I believe the ETF will be approved in May, potentially pushing Ethereum’s price to $10,000.
Crypto KOL Matthew Hyland:
Negative news around the spot Ethereum ETF was entirely predictable. Institutional investors on Wall Street need a spot Ethereum ETF to gain exposure to ETH, just as they couldn’t buy Bitcoin before the Bitcoin ETF existed. Approval is simply a matter of time.
Currently, seven entities are applying for spot Ethereum ETFs: BlackRock, Fidelity, Invesco & Galaxy, Grayscale, VanEck, 21 Shares & Ark, and Hashdex. The respective SEC review deadlines for each fund are shown in the table below. May 23 marks the key decision date for VanEck’s application—the earliest-filed spot Ethereum ETF—and its approval or rejection will directly influence decisions on other pending applications.
Overall, following this latest delay, market expectations for approval before the end of May have sharply declined. While some crypto KOLs still believe approval will come in May, Ethereum’s PoS mechanism, concerns over price manipulation, and potential classification as a security—all factors absent in the case of Bitcoin—have reduced the likelihood of a spot Ethereum ETF being approved. Perhaps we should brace ourselves for another delay in Ethereum ETF approvals.
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