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Spot Ether ETFs: Waiting for Approval
After the excitement surrounding Bitcoin spot ETFs, the focus has shifted to the potential approval of an Ethereum ETF. The SEC has delayed decisions on applications from Grayscale and BlackRock, while Fidelity’s proposal faces a crucial March deadline. This raises the question: what are the chances of these ETFs being approved soon, and does the approval of Bitcoin spot ETFs set a precedent for their potential approval?
Challenges Similar to Bitcoin ETFs
Gaining approval for Bitcoin ETFs was a complex process, and it is anticipated that the proposed Ether ETFs will face similar challenges. Discussions over issues such as cash or in-kind redemptions and surveillance-sharing agreements are expected to be lengthy and legally complicated.
Impact of Ethereum’s Classification
The regulatory ambiguity surrounding Ethereum’s classification as either a commodity or a security will play a crucial role in the potential approval of a spot ETH ETF. Clear definitions from regulators will be essential for the end users of the ETF to gain clarity on the control and reporting requirements of Ethereum.
Potential Security Classification
If Ethereum is classified as a security, it could complicate the approval process and subject the asset to US securities laws. This classification would lead to greater SEC oversight and potentially affect the involvement of infrastructure partners and custodians in overseeing the ETF.
Custody Challenges
The approval of an ETF would require accurate tracking of Ethereum’s price and secure custody of the underlying assets. The involvement of infrastructure partners and custodians in overseeing the ETF is also a significant consideration.
Spot Ether ETF Approval Timeline
Deutsche Bank expects the first Ethereum ETF to be approved by May 23, while TD Cowen predicts approval to be delayed to 2025 or 2026. The outcome primarily depends on political variables, with mixed opinions from industry insiders indicating uncertainty about the approval timeframe.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
