SEC Puts Both Grayscale and BlackRock Ethereum ETF Hopes on Hold

Ethereum image stamped DELAYED

In a double blow to proponents of Ethereum ETFs, the US Securities and Exchange Commission (SEC) has postponed its decisions on both Grayscale Investments’ ETHE trust conversion and BlackRock’s proposed spot Ethereum ETF. This leaves the Ethereum ETF landscape shrouded in uncertainty, with investors and industry players eager for any sign of progress.

No Decision On Spot Ethereum ETF Yet

Grayscale filed its application in early October 2023, seeking to convert its Grayscale Ethereum Trust (ETHE) into an ETF that tracks the price of Ethereum. BlackRock submitted its proposal in November 2023 for a new spot Ethereum ETF, potentially opening up wider access to the digital asset through traditional investment channels. The SEC has a 240-day window to either approve or reject the applications.

The regulator initially scheduled to take a stance on both applications on Thursday but decided to shelve its plans for some unknown reasons. In the meantime, the issuers have started filing new documents that address the concerns of the commission.

However, the SEC opted to extend its review period for both proposals, raising questions about the agency’s stance on Ethereum ETFs and the timeline for potential approval. A recent comment by the SEC chairman, Gary Gensler points to the suspicion that the regulator may not be eager to grant a spot Ethereum so soon after it approved the first ever Bitcoin spot ETF.

SEC Chairman’s Opinion on Spot ETF for Ethereim

“As I said two weeks ago, that which we did with regard to bitcoin exchange traded products is cabined to this one commodity non-security and shouldn’t be read to be anything other than that,” SEC Chair Gary Gensler said when asked for his thoughts on ETH ETFs.

The continued delays cast a shadow of uncertainty over the future of Ethereum ETFs in the US, potentially dampening investor sentiment and hindering institutional adoption.

Concerns over regulatory hurdles and the SEC’s perceived hesitancy towards crypto could discourage further ETF applications and limit investment options for Ethereum enthusiasts. However, some view the delays to March 10, as a sign of careful deliberation and thorough due diligence by the SEC, potentially paving the way for a more robust and compliant Ethereum ETF ecosystem in the long run.

Author: Grace

Grace likes gardening. She holds some BTC and ETH.