Spot Ethereum ETF Verdict Nears: Here’s What to Expect from SEC

The excitement is palpable as the U.S. Securities and Exchange Commission (SEC) approaches critical deadlines for verdicts on VanEck and ARK’s spot Ethereum exchange-traded fund (ETF) applications, scheduled for May 23 and May 24, respectively. Following the SEC’s green light to several spot Bitcoin ETFs in January, speculation is rife that Ethereum ETFs might be next in line for approval.

Time for the Showdown?!

A denial of VanEck’s application could set a precedent, potentially impacting similar applications from industry giants like Grayscale, Franklin Templeton, Invesco Galaxy, and BlackRock later this year. However, there’s an unexpected twist in the plot – the SEC is mulling over the idea of differentiating between Ethereum (ETH) and staked Ethereum (stETH), or “staking as a service ETH,” potentially paving the way for a spot Ethereum ETF.

Clarity Coming Soon

The SEC’s request for issuers to submit their 19b-4 filings suggests an increased likelihood of ETF approval. This filing is a significant step in the regulatory process, signaling that the SEC is considering the specifics of these applications more seriously.

According to Alex Thorn, the SEC’s potential approval of Ethereum ETFs with a distinction between ETH and stETH could align with ongoing legal battles, ensuring regulatory coherence. Anthony Pompliano, on the other hand, sees this as a watershed moment for the crypto industry, anticipating a breakthrough in overcoming major hurdles.

Adding to the anticipation, Standard Chartered Bank also predicts the approval of Spot Ethereum ETFs this week.

However, amidst the bullish sentiment, AdamAssets remains cautious about the implications of such an approval, especially in light of the Ethereum Foundation’s previous stance on securities laws. Approval might inadvertently open doors to selling unregistered investment contracts, raising eyebrows among regulators.

Market In a Frenzy

Meanwhile, Ethereum’s price has skyrocketed by over 20% in the last 24 hours, currently hovering around $3,700, driven by heightened expectations of ETF approval. QCP Capital forecasts that a positive verdict could catapult Ethereum’s price beyond $4,000, with potential highs of $5,000. Conversely, a denial could see it drop to $3,000. The market braces itself for volatility until the SEC issues an official statement.

Gensler’s SEC: Tough Nut to Crack!

Under Chair Gensler’s leadership, the SEC has maintained a stern stance on the crypto industry, initiating legal proceedings against major players like Binance, Coinbase, Kraken, and Uniswap. Drawing parallels to Grayscale’s lawsuit, which ultimately paved the way for spot Bitcoin ETF approvals, a similar legal maneuver might be necessary to secure spot Ethereum ETFs in 2024.

Crystal ball time: Approve or deny? What’s your prediction for the SEC’s decision?