Ethereum (ETH) bulls may be disappointed. Reports have surfaced that the U.S. Securities and Exchange Commission (SEC) is likely to block the introduction of Spot Ether exchange-traded funds (ETFs) as early as next month.
Prevent interaction with the SEC
According to a report on April 25th, Reutersan anonymous source familiar with recent meetings between potential ETF issuers and the Securities and Exchange Commission, said the agency may be planning to reject the Spot Ethereum ETF during its final review in May. suggests.
Unlike the heated debate before the SEC approved a spot Bitcoin ETF in January, recent talks have been one-sided. SEC staff reportedly did not get involved in substantive details regarding the Ethereum ETF application, according to four industry representatives who attended the meeting.
Officials also said that despite ETF applicants' claims that the greenlit spot BTC ETF and Ethereum futures-based ETF establish a precedent, the SEC's lack of detailed discussions with issuers suggests that there is no imminent He pointed out that this suggested a rejection.
VanEck, ARK Investment Management, BlackRock, Fidelity, and a number of other issuers have filed documents with the SEC to launch an ETF that will track the price of ETH. Regulatory deadlines to decide VanEck and ARK's applications are May 23 and May 24, respectively.
JPMorgan analysts have previously said that if the SEC refuses to approve Spot ETH proposals, ETF issuers could sue regulators and ultimately greenlight these products through court intervention. It was suggested that there is a possibility that
Until this landmark approval, the SEC had blocked spot BTC ETF applications for over a decade. That view changed only after Grayscale Investments won a major legal victory against regulators in August 2023.
Ethereum's setback
The potential rejection of the SEC ETF casts a pall over the Ethereum market, as bulls had hoped for approval of the Spot BTC ETF as a sign of widespread acceptance of crypto-based investment products.
Additionally, there are reports that the SEC is seriously considering designating Ethereum as a security.as ZyCrypto As previously reported, the Ethereum Foundation revealed in February that it had been investigated by an undisclosed “national authority.” It was later revealed that the SEC was indeed behind the request.
Impact on Ether price
Ethereum has recorded a modest 33% increase in value this year, but Bitcoin's recent increase of 47% and to all-time highs reflects market sentiment regarding the regulatory woes facing Bitcoin. Struggling to keep up with the movements.
Hong Huang, president of virtual currency exchange OKX, said: Reuters Uncertainty surrounding the approval of the Spot ETH ETF is likely to put bearish pressure on Ether prices. “As people's expectations rise, there will be more downward pressure on prices,” Huang argued.
At the time of writing, Ethereum price was trading at $3,130, up 1.5% on the day, according to data from CoinGecko.
