The United States Securities and Exchange Commission (SEC) is increasingly likely to approve an Ethereum spot exchange-traded fund (ETF), according to Eric Balchunas, a senior analyst at Bloomberg. Balchunas raised the approval odds from 25% to 75%, suggesting that political pressures may be influencing the SEC’s stance. This comes as a significant development for the cryptocurrency industry, as the SEC has previously taken a conservative approach toward cryptocurrency-related financial products.
Recent reports indicate that the SEC is requesting exchanges such as the New York Stock Exchange (NYSE) and Nasdaq to update their filings, signaling a potential change in their regulatory approach. While there has been no official confirmation from the SEC, this development has sparked speculation within the financial community.
Nate Geraci, co-founder of the ETF Institute and president of the ETF Store, pointed out that the final decision on the registration requirement for individual funds remains pending. Geraci noted that the SEC could approve the exchange rule changes separately from the fund’s registration, which could potentially delay the registration beyond the upcoming deadline for VanEck’s Ethereum spot ETF request. This would give the regulator more time to thoroughly review and approve the complex documents.
The intricacies and risks associated with proof-of-stake (PoS) cryptocurrencies add another layer of complexity to the SEC’s decision-making process. Alex Thorn, Head of Research at Galaxy, speculated that the SEC might differentiate between Ethereum (ETH) not being classified as a security and staked ETH, potentially treating it as a security. This approach would be consistent with the SEC’s previous positions and allow for the approval of Ethereum ETFs.
Prominent cryptocurrency lawyer Jake Chervinsky commented on the potential implications of the SEC approving a spot ETH ETF. Chervinsky stated that if approved, it would come as a surprise to those closely involved in the process, indicating a significant shift in US crypto policy. He suggested that the approval could be more important than the ETF itself, following the SAB 121 vote.
Overall, the approval of an Ethereum spot ETF could be a pivotal moment for cryptocurrency regulation in the United States. It could signal a broader acceptance and integration of digital assets into mainstream financial markets, potentially reshaping US crypto policy and providing legitimacy to cryptocurrencies.
