SEC Delays Ethereum ETF Decision; Fidelity to Wait 45 Days 

• The Securities and Exchange Commission has postponed its decision on Fidelity’s Ethereum ETF proposal.
• The commission has established a new date for announcing its decision.
• Fidelity is not the only asset management firm seeking approval for an Ethereum ETF.

The Securities and Exchange Commission (SEC) recently approved Bitcoin ETFs, greenlighting more than 10 issuers to list shares that invest directly into cryptocurrency in the United States. The approval marked a notable shift from the commission’s once-rigid approach to the industry, stirring hopes for a similar move in the ongoing review for Ethereum ETFs.

However, as the industry awaits a verdict, the commission has opted to extend the deadline on its decision, reverting to its traditional approach of delays.

SEC Stalls Fidelity Ethereum ETF

On Thursday, January 18, the SEC filed to extend the evaluation period of asset management firm Fidelity’s Ethereum ETF application.

The proposal, filed on November 17, 2023, proposed a new rule change that would allow the U.S. stock exchange Cboe BZX to list and trade shares of the Fidelity Ethereum Fund. 

Citing the necessity for a more comprehensive evaluation of the rule change and related concerns, the SEC extended the initial deadline by 45 days. The new date is set for March 5, 2024, by which the commission will unveil its decision to either approve or reject the proposal.

Fidelity Investments is not alone in pursuing an Ethereum ETF proposal, as BlackRock and Grayscale also await the commission’s nod on their applications.

Is the SEC Likely to Approve Ethereum ETFs?

The unpredictable nature of the Securities and Exchange Commission makes it challenging to predict a definitive outcome of the proposals.

Bloomberg analyst James Seyffart emphasized that a deadline extension is “completely expected” at this time. 

The nearest Ethereum ETF verdict deadline, slated for January 25, 2024, is for Grayscale’s application. However, industry predictions suggest that approval in January remains improbable, and a May decision is a more plausible timeframe. 

Recent remarks from BlackRock CEO Larry Fink, highlighting Ethereum’s potential as a “store of value,” have fueled speculation about a potential approval.

On the Flipside

• Bitcoin ETFs have experienced an impressive run since their launch, attracting over $10 billion in inflows.
• The potential approval of Ethereum ETFs would signal an even more favorable regulatory stance from the SEC, building on the positive precedent set by the approval of Bitcoin ETFs.
• Invesco, VanEck, and WisdomTree have also filed Ethereum ETF proposals with the SEC.  

Why This Matters

While the Bitcoin ETF approval marks a positive shift in the SEC’s approach to the industry, Chair Gensler was clear that this does not signal a pro-crypto stance. The commission remains cautious, and the extension of Fidelity Investments’ Ethereum ETF deadline suggests efforts to align perspectives before making a final decision. 

Read more on foreign regulatory approaches to Bitcoin ETFs: 
Bitcoin ETFs Banned in Singapore Over Eligibility Concerns 
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