Cryptocurrency

SEC has a ‘hard no’ stance on spot Ethereum ETFs, but issuers are optimistic: FOX reporter

FOX Business reporter Eleanor Terrett reported a wide range of expectations regarding spot Ethereum ETF approvals on Jan. 23.

Notably, Terrett suggested that the U.S. Securities and Exchange Commission (SEC) is opposed to approving a spot Ethereum ETF. She said:

“Another source tells me the line at the SEC at this very moment is a ‘hard no’ and there’s currently ‘some internal resistance’ to the idea.”

Terrett did not state whether that source is a member of the SEC itself or a member of an asset manager seeking approval from the SEC.

Terrett also noted that SEC commissioner Hester Peirce, known for her pro-cryptocurrency stances, has advocated for a more straightforward decision process. The SEC in part approved spot Bitcoin ETFs because one applicant, Grayscale, obtained a legal victory, as SEC chair Gary Gensler explained in a statement. Peirce criticized that approach in an interview with crypto news platform Coinage today, as she said that ETF approvals should involve “regular way consideration” rather than court cases compelling action.

Terrett concluded that further indications of the SEC’s stance will emerge in the coming months as it becomes clear whether it engages with S-1 registration statements. The SEC typically posts notices of meetings with asset managers and exchanges on each ETF’s page as they occur.

Asset managers appear to be optimistic

Despite resistance within the SEC, Terrett suggested that the asset managers responsible for issuing each fund are optimistic about approval.

According to Terrett:

“[One] issuer with an ETH Spot ETF application says they’re confident the approval and smooth launch of the Bitcoin spots will compel the [SEC] to approve ETH spot ETFs.”

Another unnamed issuer said that they expect a spot Ethereum ETF to launch by the end of the summer because of the SEC’s earlier approval of Ethereum futures ETFs, and because of BlackRock’s strong ETF approval record.

That source also cited the CFTC comments suggesting Ethereum is a commodity, as well as Ripple’s partial legal victory against the SEC, as factors that could more broadly prevent the SEC from labeling crypto assets as securities. However, it is not clear that those developments will directly impact spot Ethereum ETF approvals in the coming months.

Public expectations around approval vary. Bloomberg ETF analyst Eric Balchunas posits a 70% chance that an spot Ethereum ETF will be approved in May, while JP Morgan executive Nikolaos Panigirtzoglou has predicted a 50% chance of approval. Polymarket odds suggest a 53% chance of approval.

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