May 23 looms as a crucial date for the potential approval of spot Ethereum exchange-traded funds (ETFs), marking VanEck’s final deadline for approval.
The United States Securities and Exchange Commission (SEC) has once again postponed its decision on a joint spot Ethereum ETF proposed by Invesco and Galaxy Digital, signaling the second delay after a similar one in December. This delay reflects the SEC’s recent trend of extending deadlines for Ethereum ETF proposals.
In a filing on Tuesday, the SEC announced the initiation of proceedings, further delaying the decision-making process on the proposed ETF.
The filing stated, “Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change.”
The SEC has also extended deadlines for other spot Ethereum ETF proposals, including one from Grayscale Investments. Similar to its inquiry with Grayscale, the SEC raised questions regarding Ethereum’s proof-of-stake mechanism and concerns about potential control or influence concentration by a few entities, posing unique risks related to fraud and manipulation.
The SEC can prolong the review period for the Invesco-Galaxy spot Ethereum ETF for up to 240 days before reaching a final decision. Invesco filed the proposal with the commission in October 2023, and it was published in the Federal Register in November, setting the SEC’s decision deadline to July 2024.
Stakeholders have a limited time to submit comments on the Invesco-Galaxy Ethereum ETF proposal, with comments due within 21 days, followed by a 35-day rebuttal period, according to the SEC.
Market Uncertainty Persists
The delay in approving spot Ethereum ETFs has left market analysts uncertain about when such investment vehicles might receive approval.
While some analysts at Standard Chartered suggest that approval could come as soon as May 23, others, like Bloomberg Intelligence analyst James Seyffart, anticipated the recent delay, stating, “100% expected, and more delays will continue to happen in the coming months.”
Seyffart emphasized that May 23 remains the critical date for spot Ethereum ETFs, representing VanEck’s final deadline for approval.
Despite the SEC’s recent decision to approve several spot Bitcoin ETFs, speculation about a similar approach toward Ethereum-based investment vehicles persists. However, SEC Chair Gary Gensler clarified in a statement that the SEC’s move last month was specific to Bitcoin and should not be viewed as a broader endorsement of cryptocurrency ETFs.