Asset manager WisdomTree has decided to withdraw its S-1 filing for an Ethereum exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC). This marks the latest setback for efforts to launch spot Bitcoin and Ethereum ETFs in the US market.
WisdomTree initially submitted its S-1 filing for the Ethereum ETF in May 2021, seeking approval for the ETF to be listed on the Chicago Board Options Exchange’s BZX Exchange. However, the company has now decided to withdraw the application.
While WisdomTree did not provide a specific reason for the withdrawal, it is likely related to the challenges faced by the cryptocurrency market and the SEC’s ongoing scrutiny of ETF proposals.
In a similar move, asset manager VanEck announced that it would be closing its futures-based Ether ETF due to insufficient demand. The ETF, known as the VanEck Ethereum Strategy ETF (EFUT), will stop trading on September 16th, and fund assets will be liquidated and returned to investors.
The decision by WisdomTree and VanEck to withdraw or close their Ether ETFs highlights the challenges faced by the cryptocurrency industry in launching spot-based ETFs in the US. The SEC has been cautious in approving such ETFs, citing concerns about market manipulation and investor protection.
The withdrawal of these ETF proposals could have a negative impact on the cryptocurrency market. ETFs can provide a more accessible and regulated way for investors to invest in cryptocurrencies. The lack of approved spot ETFs may limit institutional investment in the market.
The decision by WisdomTree and VanEck to withdraw their Ethereum ETF filings is a setback for the cryptocurrency industry. While the SEC continues to evaluate ETF proposals, the challenges faced by these asset managers highlight the regulatory hurdles that need to be overcome for the launch of spot Bitcoin and Ethereum ETFs in the US market.
As the cryptocurrency market evolves, it remains to be seen whether the SEC will eventually approve spot ETFs and whether institutional investors will embrace these products. The availability of ETFs could provide a significant boost to the cryptocurrency market, attracting new investors and increasing liquidity.
