Bittime -The United States Securities and Exchange Commission (SEC) postponed making a decision regarding the next steps for the Invesco GalaxyEthereum exchange-traded fund or ETF
In an announcement posted on Monday, the agency set the next deadline of July 5, 2024 to approve or reject the proposed ether ETF.
“The Commission finds that it is more appropriate to establish a longer period for issuing orders approving or rejecting proposed rule changes to allow sufficient time to consider the proposed rule changes and the issues raised therein,” the SEC said in a statement .
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Previously, the SEC had delayed taking action against the Invesco Galaxy Ethereum ETF and requested public comments in February.
The institution has also extended the deadline for other spot Ethereum ETF proposals, including those from Grayscale, Franklin Templeton, VanEck, and BlackRock over the past few weeks.
Optimism regarding approval of such products by the SEC has declined over the past few months. For example, Bloomberg ETF analyst Eric Balchunas has lowered his estimate of the chances of a spot Ethereum ETF being approved through the end of May from around 70% to 25%.
SEC considerations regarding Ethereum ETFs
The SEC's decision to delay taking action against the Invesco Galaxy Ethereum ETF raised questions and speculation among market participants. Will this kind of product get the green light from regulatory authorities? Let's examine some of the factors that influenced the SEC's decision:
- Similarities to a Bitcoin ETF : The SEC is seeking public comment to understand whether the arguments in favor of approving a spot Bitcoin ETF also apply to an Ethereum ETF. In recent months, the approval of Bitcoin ETFs has made headlines, and regulators want to ensure that the same arguments apply to Ethereum ETFs.
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- Potential for Manipulation : The SEC also wants to know whether spot Ethereum ETFs are vulnerable to manipulation. The crypto market is known for its volatility, and regulators want to ensure that these types of products will not be abused.
- Linkage to Futures Products : Considerations regarding Ethereum ETFs also involve futures products. Do Ethereum spot ETFs have anything in common with exchange-traded Ethereum futures products?
Signs of Ethereum ETF Optimism
Although optimism has waned, there are some signs to suggest that the SEC is still seriously considering an Ethereum ETF. Several issuers have updated their documents, although none specifically relating to ETH yet.
If publishers start to incorporate direct feedback from regulators, this could be a positive sign.
Conclusion
The SEC's decision regarding the Invesco Galaxy Ethereum ETF will affect the crypto market as a whole.
Investors and market participants should continue to monitor recent developments and understand that the approval or rejection of an Ethereum ETF will have a significant impact on the price and liquidity of this crypto asset.
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