SEC Seeks Public Feedback on Spot Ether ETF Proposals from Fidelity, Grayscale, and Bitwise

Last Updated on April 4, 2024

Written by

Efe Bravo

flags of Securities and Exchange Commission and USA painted on cracked wall

Key Takeaways:

The U.S. Securities and Exchange Commission (SEC) is expected to make a decision on the applications for spot Ether ETFs in May, following public solicitations for comments on proposed rule changes from firms including Bitwise, Fidelity Investments, and another major entity.
Bloomberg ETF analyst James Seyffart expresses a neutral outlook on the approvals, noting that the SEC’s call for public input is routine and not necessarily indicative of a positive decision for Ethereum ETFs.
The SEC’s review of the Ethereum Foundation and discussions around whether Ether should be considered a security add complexity to the approval process of spot ETH ETFs, amidst industry anticipation for a decision that could set a new precedent for cryptocurrency ETFs.

With speculation mounting, the financial community is keenly awaiting the U.S. Securities and Exchange Commission’s (SEC) final verdict on the applications for spot Ether (ETH) Exchange-Traded Funds (ETFs) in May, potentially marking a pivotal moment for VanEck’s filing.

The SEC has made a public call for comments on the proposed rule changes that would facilitate the listing and trading of spot Ether ETFs.

SEC asks for public comment for Grayscale, Bitwise and Fidelity spot Ethereum ETFs https://t.co/jCyW0tkNiV
— The Block (@TheBlock__) April 3, 2024

This invitation extends to three notable applications from asset management firms, including Bitwise, Fidelity Investments, and another prominent entity, which have proposed the listing of their ETFs on prominent stock exchanges, NYSE Arca and Cboe BZX Exchange, respectively.

This step precedes the SEC’s anticipated decision in May on this new investment avenue.

🚨 BREAKING 🚨

SEC ASKS FOR PUBLIC COMMENT
FOR GRAYSCALE, BITWISE AND
FIDELITY SPOT ETHEREUM ETFs.

GIGA BULLISH 🔥
— Ash Crypto (@Ashcryptoreal) April 3, 2024

James Seyffart, a Bloomberg ETF analyst, shared his insights on social media on April 2, expressing a neutral stance on the development.

“Nothing in the filings signal to me that anything has changed,” he mentioned, highlighting that the SEC’s request for public input is a standard part of the ETF approval process, not indicative of a favorable outcome for Ethereum ETFs.

Earlier this year, the SEC marked a significant milestone by approving several spot Bitcoin ETFs, a move influenced by investor interest and media scrutiny, with the commission’s Chair playing a crucial role in the decision.

JUST IN: The SEC has requested public comments regarding #Ethereum ETFs from Grayscale, Bitwise, and Fidelity. 🔥🔥🔥$ETH / $BTC SPRING LOADING#ALTSEASON LOADING pic.twitter.com/zuIF8OIT5p
— Altcoinist.com (@Altcoinist_com) April 3, 2024

Despite this, the likelihood of Ether ETFs receiving a similar nod has been a topic of much debate among analysts for 2024.

A spotlight is currently on VanEck’s spot Ether ETF application, which faces a decisive deadline on May 23.

This application is part of a broader wave of filings by various asset managers, including Hashdex and ARK 21Shares, eagerly awaiting the SEC’s judgment.

The SEC has asked for public comment for Grayscale, Bitwise and Fidelity spot Ethereum ETFs, per the Block
— unusual_whales (@unusual_whales) April 3, 2024

The ongoing scrutiny into the Ethereum Foundation by the SEC adds another layer of complexity, potentially impacting the approval process for spot ETH ETFs.

This includes considerations over whether Ether should be classified as a security.

In response, Consensys, a blockchain technology company, has argued against the SEC’s concerns over fraud and market manipulation regarding Ether ETFs, stating such apprehensions are unfounded.

🚨US SEC REQUESTS PUBLIC COMMENT ON SPOT ETH ETF APPLICATIONS🚨

– The US Securities and Exchange Commission has just now requested public comment on various spot #Ethereum ETF applications.

– In particular, those of Grayscale, Fidelity, and Bitwise, and the comment period will… https://t.co/X7LC59zz1M pic.twitter.com/3G31STZa6G
— BSCN (@BSCNews) April 3, 2024

As the deadline approaches, the industry watches closely, with the SEC’s decision poised to influence the trajectory of Ether ETFs and potentially set a new precedent in the cryptocurrency ETF landscape.