- The SEC yesterday delayed the Hashdex and Ark 21Shares spot Ethereum ETF applications
- Analysts predicted the delays and are convinced there would be more
- The SEC’s silence, having not reached out to applicants with comments on their initial filings, is a red flag
- The SEC will most probably deny the spot Ethereum ETFs by May 23, say analysts
The US SEC (Securities and Exchange Commission) has delayed its decision on the Ether ETF applications of Ark 21Shares and Hashdex. These follow a series of other delays that the regulator has imposed on the spot Ethereum product. Earlier this month, the SEC also deferred BlackRock’s and Fidelity’s decisions, sparking concern about what the outcome would be for a spot Ethereum ETF.
The SEC Delays Ark 21Shares’ and Hashdex’s spot Ethereum ETF Applications
Yesterday, the SEC once again increased the uncertainty around the spot Ethereum ETF by postponing its decision on Hashdex’s and Ark 21Shares’ filings to offer the product. The SEC is required to approve or disapprove a rule change no later than 180 days from the publication of the notice of filing for the rule change. However, the Commission could also extend the period by an additional 60 days if the decision requires a longer period.
In Hashdex’s case, “the 180th day after publication of the proposed rule change is March 31, 2024” says the SEC filing. However, the Commission says it will extend the period for a decision by an “additional 60 days” so that it can have “sufficient time to consider the proposed rule change and the issues raised therein.” This postponement now sets May 30 as the final date for a decision on the proposed rule change.
As for Ark 21Shares’ application, the SEC has stated it’s postponing it to a final deadline of May 24 so it can further solicit public comments on the proposed rule change and have “sufficient time to consider the proposed rule change” and the issues raised in it.
These delays align with Bloomberg’s James Seyffart’s February prediction that “more delays will continue to happen in coming months.” According to Seyffart, the fate of the spot Ethereum ETF will be determined on the May 23rd final deadline for VanEck.
Senior ETF Analysts Lean Towards A May 23rd Denial Of The Spot Ethereum ETF
ETF analysts have lost their optimism about the spot ETH ETFs following the continuous delays and the absence of meaningful engagements and comments from the SEC to the issuers. Bloomberg’s James Seyffart says his “cautiously optimistic attitude for ETH ETFs has changed from recent months.”
“We now believe these will ultimately be denied May 23rd for this round. The SEC hasn’t engaged with issuers on Ethereum specifics. Exact opposite of #Bitcoin ETFs this fall,” he adds.
Senior ETF Analyst Eric Balchunas had previously set the odds for an Ethereum ETF approval at 35 percent. According to Balchunas, all the signs that pointed to approval in the case of the spot Bitcoin ETFs “are not there this time.”
While Balchunas thinks the odds of a spot Ethereum ETF happening now are low, he says that “long-term we think it will happen.” In one of his latest posts on the subject yesterday, he hints that the SEC not reaching out to issuers puts an approval in doubt.