- Fidelity Investments recently filed a request for the establishment of its spot Ethereum (ETH) exchange-traded fund (ETF) to the US Securities and Exchange Commission (SEC).
- The filing was accomplished this Wednesday, March 27, 2024.
- Analysts have mixed feelings about their chances of approval.
Fidelity’s S-1 Form for Spot Ethereum ETF
Fidelity Investments is looking to expand its cryptocurrency-based products following the success of its spot Bitcoin (BTC) exchange-traded fund. Recently, the asset management firm submitted an S-1 form to the US Securities and Exchange Commission for a spot Ethereum ETF.
The document filed by the $4.5 trillion firm for spot Ethereum ETF was dated March 27, 2024. The proposed financial instrument carried the name “Fidelity Ethereum Fund,” but was referred to in the document as “Trust” for brevity.
So far, there were notable areas left blank in the application to make way for revisions later on. Among the missing specifics included the “Transfer Agent,” initial price per share, and the ticker symbol of the product.
Will the SEC Approve?
The application of Fidelity comes hot on the heels of the SEC’s ongoing probe regarding the status of Ethereum. Forbes, citing anonymous reliable sources, revealed that the regulator has been inviting several US companies since 2022 to ask them for documents pertaining to their dealings with the Ethereum Foundation. The investigation supposedly started when the second-largest cryptocurrency by market cap completed its Merge event.
One of the major changes during the affair was the shift of Ethereum from a proof-of-work (PoW) model to a proof-of-stake (PoS) framework. SEC Chair Gary Gensler viewed the new mechanism employed by the blockchain, particularly the staking part, as too similar to how security investments worked. This gave him the reason to greenlight an enquiry centering on the digital asset.
The report consequently divided analysts on the prospect of a spot Ether ETF approval in the US. Among them were Bloomberg’s James Seyffart and Eric Balchunas who have shown mixed feelings about this kind of product.
Their bleak outlook was further fueled by the SEC’s lack of engagement on the potential issuers of spot Ether ETFs as of late. According to them, this was a total opposite of what took place leading to the approval of spot Bitcoin ETFs wherein the regulator was very vocal about them in the press and has conducted meetings with the stakeholders as the deadline for their verdict approached.
Now, add the brewing investigation on ETH for its potential reclassification as security, and the future for its spot ETF in the US is further muddied.