As anticipation grows among cryptocurrency investors and financial institutions, the U.S. Securities and Exchange Commission (SEC) is expected to make a major decision this week that could impact the future of exchange-traded funds. (ETF).
Despite the recent success of spot bitcoin ETFs issued by financial giants such as BlackRock (NYSE, Fidelity and VanEck), the suggestion is that the regulator is unlikely to approve similar products for ether at this stage.
Cryptocurrency Regulation: SEC Stance on Ether
In a recent interview with CNBC, SEC Chairman Gary Gensler said that while cryptocurrencies are a small part of the overall markets the SEC oversees, they are “a huge part of the scams, frauds and problems in our markets.” because, without prejudging any token”. , much of this field does not meet the protections of our securities laws.”
When asked by the host whether Ethereum is a commodity or a security and whether there will one day be an ETF, Gensler was noncommittal, stating that the fundamental question is “How do we ensure that the American investor is protected?”
“At this time, they are not receiving the information required or necessary,” he added. “The brokers at the center of this fairly centralized market are generally conflicted and do things that we would never allow the NYSE to do.”
Once again, when asked about a possible Ethereum ETF, Gensler kept his cards close to his chest and said that “those presentations will be taken up at the appropriate time.”
Gensler's vote is generally seen as critical to the potential approval of Ethereum ETFs. However, some companies that issued spot bitcoin ETFs are not optimistic that the SEC will do the same with ether, according to a CNBC report. VanEck CEO Jan van Eck told CNBC that they were the first to apply for Ethereum in the US and believe they will “probably be rejected.”
Furthermore, speaking to Investing.com, Roshan Shah, co-founder and CEO of Decimal Digital Coin, said that ETFs “only exist today because their approval was effectively forced by the courts in the grayscale conversion decision in August 2023” and that “there is no such thing.” There is a precedent or ruling for Ether.”
“Markets are just beginning to understand Bitcoin, and a position in Ether is much more complex,” Shah said. “The SEC wants to keep people's pensions, 401k plans and retirement accounts away from that for as long as possible.”
He believes regulators also fear a slippery slope, which started with Bitcoin ETFs because Ethereum ETFs “could open the door for many other digital assets to access public markets.”
“Protecting precedent is critical for the SEC because their argument for rejecting crypto assets in an ETF weakens with each ETF they approve,” Shah adds. “We expect the SEC to perpetually delay Ether ETFs, perhaps even until the courts force it to approve them, as is the case with Bitcoin.”
Meanwhile, Charles d'Haussy, CEO of the dYdX Foundation, told Investing.com that he would be surprised if the SEC said yes at this point, despite his optimistic view on the future approval of an Ethereum spot ETF. .
“Ethereum ETFs may mirror the path taken with Bitcoin ETFs. Since futures-based Ethereum ETFs have already been approved, if the SEC denies approval of spot Ethereum ETFs, it will likely face legal challenges and eventually lose, similar to what happened with Bitcoin ETFs. ” d'Haussy told us.
“Ethereum ETFs may be less profitable than directly holding Ether (ETH) due to the absence of staking reward distributions.”
Why is Ethereum going up?
Ethereum is up about 3.8% in the last seven trading days after a drop between mid-March and mid-May.
Still, after a rally between October 2023 and March 20204, the cryptocurrency is still on solid footing, up more than 35% this year and more than 69% in the last 12 months as the overall crypto market skyrocketed, of course, led by Bitcoin and investors had been anticipating possible Ethereum ETFs.
Find the best crypto ETFs
While it looks increasingly likely that Ethereum will fall by the wayside when it comes to ETFs, investors can still explore top cryptocurrency exchange-traded funds (ETFs) to maximize portfolio potential. Dive into our comprehensive list of the top Bitcoin Crypto ETFs, carefully selected to give you diversified exposure to this exciting asset class, without the complexities of physical ownership.
