Crypto enthusiasts and investors are anticipating the potential approval of a spot Ethereum ETF, and Scott Johnsson, Van Buren’s General Partner and General Counsel, is here to guide us through the intricacies in a series of Twitter threads titled “The Road Ahead: A ETH Spot.”
These are some brilliant insights you can’t afford to miss out on. Read on for a simple breakdown!
Johnsson begins with a broad overview, presenting a four-step roadmap for spot ETF approval. Drawing parallels with the successful Bitcoin ETF journey, the process involves securing a DCM Futures Listing, advancing through ’40 Act Futures ETF, ’33 Act Futures ETF, and finally achieving the coveted spot approval.
The journey starts with a historical BTC spot ETF approval timeline, emphasizing milestones like the CME Bitcoin Commodity Futures Listing in December 2017 and the recent spot ETF approval in January 2024. Johnsson underscores the crucial role of a DCM Futures Listing as a prerequisite for any spot ETF.
In the second section, Johnsson delves into Section 6(b)(5) of the Exchange Act, a hurdle for both BTC and potential ETH spot ETFs. He breaks down the impact of the Grayscale ruling on the SEC’s stance, focusing on the “significant size” test and the Surveillance Sharing Agreement (SSA).
Read More: BlackRock’s Ethereum ETF: March 10th Deadline Could Be Make-or-Break!
The third part explores in detail the SEC’s approval order for BTC spot ETFs, unraveling the reasoning behind addressing the “potential fraud and manipulation” concern outlined in Section 6(b)(5). Johnsson analyzes five key points from the order, highlighting the SEC’s sidestepping of the “significant size” test.
Transitioning to the fourth part, Johnsson applies insights from BTC to speculate on the potential approval of an ETH spot ETF. He highlights an optimistic perspective, emphasizing the SEC’s correlation-based rule for approval. However, he cautions about potential challenges and the impact of ongoing regulatory actions against platforms such as Coinbase and Binance.
Did You Know? SEC Says ‘No’ to Ethereum ETFs, but Issuers Keep the Faith
Responding to queries about the estimated timeline for spot ETH ETF approval, Johnsson suggests another year, maybe two, anticipating the need for the early period of the ETH futures market to roll off from the sample period.
The SEC’s path to approving an ETH spot ETF is complex, but far from clear. Share your predictions.
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