Bittime - While there is consensus that a US spot Ethereum (Ether) ETF product is coming soon, doubts still surround the decision. Amid speculation about approval in May, several factors could cause a delay, raising questions about the future of Ether ETFs.
Awaiting Ethereum ETF Decision in May
The United States Securities and Exchange Commission (SEC) is predicted to decide on the Ethereum spot ETF proposal on May 23. This decision is eagerly awaited by investors and crypto industry players who hope it will open wider and regulated access to Ethereum, the second largest crypto asset in the world.
"I'm 100% sure this will be approved; I'm not 100% sure when," Christopher Perkins, President of CoinFund, told Blockworks. "It's unfortunate that we don't have greater regulatory certainty."
The approval of a spot Bitcoin ETF in January 2024 sets an important precedent. SEC Chairman Gary Gensler said in a statement that the action was "limited to ETPs holding one non-financial commodity, Bitcoin."
Gensler added that the agreement represents the "most sustainable path forward" partly due to the SEC's defeat in court against Grayscale Investments in August 2023. Grayscale CEO Michael Sonnenshein stressed that the essence of the lawsuit is the existence of an "indissoluble bond" between the Bitcoin futures market which is regulated by the spot market.
The SEC's decision to approve a Bitcoin futures ETF paves the way for a Bitcoin spot ETF. 10 spot Bitcoin ETFs have traded on US exchanges over the past 10 weeks, strengthening the argument that even a spot Ether ETF is inevitable.
In October 2023, the SEC allowed Ether futures ETFs to trade, strengthening the belief that Ethereum ETFs will soon follow suit. These funds, like Bitcoin futures ETFs, hold futures contracts traded on the Chicago Mercantile Exchange (CME), which is overseen by the Commodity Futures Trading Commission (CFTC).
"What we see now is very similar, if not stronger, data for the correlation between the regulated market for Ethereum...and the spot Ethereum market," Sonnenshein said. "The question is whether the data in front of them this May will be enough to convince the SEC to approve an Ether ETF."
However, amidst this optimism, doubts still surround the SEC's decision.
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Factors That May Hinder Ethereum ETF Approval
Several factors could cause a delay in Ethereum ETF approval:
1. Uncertainty of Ether's Regulatory Status
Ether's status as a security or commodity remains unclear. The SEC has not provided a definitive statement on its status. This uncertainty may cause the SEC to delay its decision.
2. Concerns About Staking
Some Ether ETF proposals include provisions for staking, the process used to validate transactions on the Ethereum blockchain and generate rewards. The SEC may be hesitant to approve ETFs that involve staking due to concerns that they will improve the securities characteristics of Ether.
3. Lack of SEC Involvement:
The SEC has not had much involvement with Ether ETF issuers so far. This lack of communication may indicate the SEC's doubts about the proposal.
4. Political Factors
Politics may play a role in the SEC's decision. A change in leadership or pressure from Congress could affect the approval of an Ether ETF.
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Potential Impact of Ethereum ETF Delay
Delays in Ether ETF approval could impact:
1. Investors
- Investors who want to invest in Ethereum in a regulated manner will have to wait a little longer.
- This can put pressure on the price of Ethereum .
2. Institutional Adoption
- The approval of an Ether ETF could increase institutional adoption of Ethereum.
- Delays can slow down this process.
3. Ethereum Ecosystem
- An approved Ether ETF could increase the liquidity and stability of the Ethereum market.
- Delays may hinder the growth of the Ethereum ecosystem.
Ethereum ETF Long-Term Outlook
Despite potential delays, the long-term outlook for Ethereum ETFs remains positive. Factors supporting its approval include:
- High investor demand
- Increased regulatory compliance
- Growth and maturity of the Ethereum ecosystem
Conclusion
While an Ethereum ETF is unlikely to be approved in May, its long-term outlook remains promising. Investors should continue to monitor regulatory developments and consider factors that may influence future approval of Ether ETFs.
Overall, Ether ETFs have the potential to open broader and regulated access to Ethereum, drive institutional adoption, and increase the liquidity and stability of the Ethereum market. Despite the potential delay in May, the long-term outlook for Ethereum ETFs remains positive.
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How to Buy Ethereum (ETH) on Bittime
You can buy and sell Ethereum (ETH) in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Ethereum (ETH) is available on Bittime with the market pair ETH/IDR . To be able to buy ETH/IDR at Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Ethereum (ETH) on Bittime.
Monitor price chart movements for Ethereum (ETH), Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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