All Eyes on SEC: Will They Approve VanEck’s Spot Ethereum ETF?

With the clock ticking down to the much-anticipated verdict on the inaugural Ethereum Exchange-Traded Fund (ETF), market enthusiasts are holding their breath for the SEC’s decision. VanEck’s application faces judgment on May 23, followed closely by Ark 21Shares on May 24.

This decision isn’t just about VanEck and Ark 21Shares. It’s a pivotal moment that could shape the fate of several other hopefuls, including Hashdex, Grayscale, Invesco Galaxy, BlackRock, and Fidelity, all eagerly awaiting their regulatory fate.

Folks, It’s Make-or-Break Time!

On May 20, Nate Geraci, the President of ETF Store, highlighted that the SEC’s approval hinges on both the 19b-4s (exchange rule changes) and the S-1s (registration statements). While “technically possible” for the SEC to greenlight the 19b-4s and then hit pause on the S-1s, there’s been limited dialogue with issuers.

Understanding the 19b-4s and S-1s

The 19b-4, a filing by national securities exchanges like the NYSE or Nasdaq, is the gateway for altering rules or introducing new products, such as spot ETH ETFs. Meanwhile, the S-1 provides a detailed breakdown of the company’s operations and offerings.

Insights from industry veteran “Gronky” on X suggested that the SEC might use delay tactics to delve deeper into market dynamics or the specific structures of these ETFs, without outright dismissal.

Key Players

Just five SEC Commissioners will vote on whether to approve or deny VanEck’s ETF. Gary Gensler, who voted in favor of approving spot Bitcoin ETFs in January, is among them. 

The other four are crypto-friendly Commissioners Hester Pierce and Mark Uyeda and anti-crypto Commissioners Caroline Crenshaw and Jaime Lizárraga. This lineup suggests that Gensler’s vote could once again be the deciding factor.

What If the ETH ETF is Approved?

Should the SEC greenlight VanEck’s ETF on Wednesday, ETH prices are poised for a short-term surge. However, prevailing wisdom leans towards a rejection. Analysts argue that even if the ETF faces a setback this week, the eventual approval is all but certain.

Analyst “Mister Crypto” noted that the bearish rejection scenario is already priced in, a sentiment echoed by other traders and analysts. A surprise approval, however, could catch the market off guard.

ETH Price Analysis

Recent market trends paint a mixed picture: Ethereum hit a yearly low against Bitcoin (0.044 BTC) on May 16 but has since rebounded by approximately 6%. Despite this, prevailing sentiment remains bearish, shadowed by the impending ETF ruling. 

Presently, ETH prices hover slightly below $3,111, with an SEC nod potentially catapulting them towards the $3,500 resistance level and beyond, marking a significant uptick.

Also Check Out: Will Spot Ethereum ETFs Get the Green Light? A Deep Dive Into the Approval Process

Are you invested in Ethereum? How will the ETF decision affect your strategy?