- BlackRock’s Ethereum
ETF application decision delayed by the SEC, extending the deadline to March 10.
- Analysts predict sporadic delays, with a final decision potentially arriving on May 23.
- SEC’s approach mirrors the pattern observed with spot Bitcoin ETFs, indicating a cautious stance towards crypto ETFs.
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This article explores the SEC’s recent delay in approving BlackRock’s Ethereum ETF, analyzing the potential impact on the crypto market and investor access to Ethereum.
SEC Extends Review Period for BlackRock’s Ethereum ETF
SEC, BlackRock has deferred its application for an Ethereum ETF.
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The Securities and Exchange Commission (SEC) has recently extended its review period for BlackRock’s application for a spot Ethereum ETF. Originally expected to provide a decision by March, the SEC has now pushed the deadline to March 10. This delay follows a similar pattern seen in the SEC’s approach to Fidelity’s Spot Ethereum ETF, with a decision now anticipated by March 5. The SEC cites the need for additional time to consider the proposal and related issues, reflecting its cautious approach towards cryptocurrency-based ETFs.
Analysts Predict Further Delays and Final Decision in May
Industry analysts, including Bloomberg’s James Seyffart, anticipate further sporadic delays in the SEC’s decision-making process. Seyffart, drawing from historical patterns, predicts a final decision by May 23. This extended timeline suggests that the SEC is taking a measured approach in evaluating the implications and potential risks associated with Ethereum ETFs. The pattern of delays is not new, echoing the experiences of spot Bitcoin ETFs, which also faced significant hurdles before gaining approval earlier this year.
Comparing SEC’s Approach to Ethereum and Bitcoin ETFs
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The SEC’s handling of the Ethereum ETF application mirrors its approach to Bitcoin ETFs, characterized by skepticism and extensive review periods. SEC Chairman Gary Gensler’s past remarks have indicated a reluctance towards cryptocurrency ETFs, leading to the perception that the Bitcoin ETF approval was a reluctant concession. Despite this, there is a sense of optimism surrounding Ethereum ETFs, bolstered by the pro-crypto stance of SEC Commissioner Hester Peirce. Peirce advocates for applying traditional ETF standards to cryptocurrency ETFs, a move that could simplify and expedite the approval process.
Broader Implications for the Cryptocurrency ETF Market
While the focus remains on Ethereum, the broader cryptocurrency market is watching closely. There is particular interest in the potential for an XRP ETF, though legal challenges cast doubt on its feasibility in the near future. Analysts like Seyffart suggest that a 2024 launch for an XRP ETF is unlikely. In the meantime, issuers and investors are keenly observing SEC staff signals for any inclination towards engaging with Ethereum ETF applications. This level of engagement, similar to what was seen with spot Bitcoin ETFs, could be pivotal in determining the future landscape of cryptocurrency ETFs in the United States.
The SEC’s delay in approving BlackRock’s Ethereum ETF underscores the regulatory body’s cautious and deliberate approach to cryptocurrency ETFs. While this extends the wait for investors eager for broader access to Ethereum, it also reflects the SEC’s commitment to thorough evaluation. The final decision, expected by May, will be a significant indicator of the SEC’s stance on the integration of cryptocurrencies into mainstream financial products. The outcome could have far-reaching implications for the future of cryptocurrency ETFs and their role in the broader investment landscape.