On May 23, the U.S. Securities and Exchange Commission (SEC) is expected to reject an application that could affect the fate of the Ethereum Spot ETF. Analysts are predicting a negative outcome due to the lack of significant engagement with potential issuers and the unclear regulatory status of Ethereum.
After the staking feature was removed from Ark Invest's application yesterday, the probability of approval for an #ETH spot #ETF suddenly exceeded 50% in some prediction markets.
The recent SEC investigation into the #ETFvsBTC Foundation has further complicated the situation. As a result, Bloomberg Intelligence ETF analyst Eric Bartunas suggested that an Ethereum spot ETF could be approved as early as late 2025.
If rejected, potential ETF issuers such as #BlackRock , Fidelity and Arc Invest have two options: follow Grayskale's lead and file a lawsuit with the SEC or reapply later.
The upcoming U. S. election could have a significant impact on the future of ethereum ETFs. If former President Donald Trump wins a second term, the SEC leadership could be replaced. The new president may take a more cryptocurrency-friendly stance than current president Gary Gensler.
If a new president is elected, the application will be resubmitted. Perhaps it will be approved. Or a lawsuit will have to be filed. Either way, it will take another year to make a final decision," Bartunas said.
Grayscale filed a lawsuit against the SEC in 2022; in September, a judge ruled that the SEC had rejected the application in an arbitrary and capricious decision. Four months later, the #ETFvsBTC ETF fund was launched.
However, this strategy is unlikely to be repeated with the Ethereum ETF. Bartunas suggested that Grayscale, which experienced significant outflows when converting its Bitcoin trust to an ETF, may not actively pursue converting its Ethereum trust.
Other potential issuers are unlikely to follow Grayscale's lead and sue regulators. Neither company wants to anger the SEC. Grayscale was unique in that it was not a major ETF issuer. Other companies have other businesses and are more wary. " says Mr. Bartunas.
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