Spot Ether ETF Approval Wait Continues as SEC Delays Decision on Two Filings
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On April 23, the United States Securities and Exchange Commission (SEC) delayed its decision on the proposed spot Ethereum exchange-traded funds (ETF) submitted by Grayscale and Franklin Templeton.
Spot Ether ETF Applications Verdict Set for June 2024
The US SEC extended the timeline for its decision on the Franklin Ethereum ETF to June 11, 2024, stating that it requires more time to consider the proposed rule change and related issues.
JUST IN: SEC DELAYS DECISION ON GRAYSCALE & FRANKLIN TEMPLETON $ETH ETF… AGAIN
— BSCN Headlines (@BSCNheadlines) April 23, 2024
US SEC’s statement reads,
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”
Franklin Templeton filed its S-1 registration statement for the Franklin Ethereum ETF on February 12, 2024, intending to reflect the price of Ether. The fund’s custodians would be Coinbase Custody Trust Company and the Bank of New York Mellon.
In a similar move, the SEC also postponed a decision on the Grayscale Ethereum Trust’s proposal. Grayscale had filed a Form 19b-4 alongside NYSE Arca on October 2, 2023, to convert the Grayscale Ethereum Trust to a spot Ether ETF. But it went on to have a successful conversion of the Grayscale Bitcoin Trust to a spot Bitcoin ETF in January after a court victory and SEC approval.
The SEC’s next deadline to approve or disapprove Grayscale’s Ethereum spot ETF is June 23, 2024.
One month out from the @SECGov’s deadline to either approve or deny the $ETH spot ETFs.
Today, the SEC delayed making decisions on applications from @FTI_US and @Grayscale.
As has been widely reported, the consensus is that because there has been little to no meaningful…
— Eleanor Terrett (@EleanorTerrett) April 23, 2024
It could be recalled that on January 10, 2024, the US SEC finally approved spot Bitcoin ETFs, which recorded an impressive inflow of $31.6 million on April 23 while playing a part in the bullish run of Bitcoin as experts advocate for increased investment in the asset.
The inflow trajectory of spot Bitcoin ETFs has sparked a wave of optimism among crypto communities for the approval of similar products backed by Ethereum.
However, it has been over three months since spot Ether ETF applications were submitted, and the approvals have not been made as the SEC continues its delayed decisions.
This latest delay of verdict on Grayscale and Franklin Templeton applications follows similar postponements in March 2024 for spot Ether ETF filings from BlackRock, Fidelity, and VanEck, which has further dampened hopes for a spot Ethereum ETF approval.
Meanwhile, Bloomberg ETF analyst Eric Balchunas recently lowered his predictions of the chances of approval for a spot Ether ETF by May from about 70% to 25% amidst these delays.
Getting tagged in tweets about this filing, the Eth corr study, and other eth etf hopium. I respect it all but our odds for Eth ETF approval in May remain a pessimistic 25% (I’d go lower if I could tbh). There’s 7 wks till deadline and radio silence from SEC = bleak. (Again,… https://t.co/fc8elrYm64
— Eric Balchunas (@EricBalchunas) March 28, 2024
BlackRock and Grayscale Files Spot Ether ETF Amendments Despite Delays
In a recent development, Grayscale filed a form S-3 with the US SEC on April 23 to register the conversion of its Ethereum Trust to a spot Ether ETF under the Securities Act of 1933. This filing is an important step required for the SEC to proceed with the approval process for the ETF.
🚨NEW filings from @Grayscale:
The asset manager has just filed its Form S-3 with the @SECGov, a registration statement for the conversion of its Ethereum Trust to a spot $ETH ETF. Unlike the other ETH ETF issuers, Grayscale does not have to file an S-1 because its Ethereum…
— Eleanor Terrett (@EleanorTerrett) April 23, 2024
On April 19, BlackRock also filed an amendment to its spot Ether ETF application through the Nasdaq exchange. The SEC published a notice on April 23 detailing the changes in the amendment, which primarily focused on the creation and redemption of shares.
The notice also extends the comment period on the proposal by 21 days after its publication in the Federal Register. However, no new deadline for an SEC decision was specified.
BlackRock initially filed an S-1 application for a spot ETH ETF in November 2023. The decision on this application was delayed in March 2024. Subsequently, in the same month, the SEC postponed decisions on Hashdex and ARK 21 spot ETH ETF applications by two months, with the new deadline for late May 2024.
