- Ethereum ETF rejection fears heighten as issuers weigh in on the likely fate of the proposals under the SEC’s review.
- VanEck CEO anticipates Ether ETF rejection.
- The CEO of BlackRock has expressed optimism amid the mixed sentiment.
The Ethereum ETF buzz across the industry is heating up as anticipation for the proposed investment vehicle heightens among issuers and investors. While there was initially high optimism, driven by the approval of Bitcoin ETFs, the sentiment is quickly shifting as hopes dwindle due to the stagnation and lukewarm reception in the ongoing review by the Securities and Exchange Commission (SEC).
The waning enthusiasm has extended to Ether ETF issuers, who now chart a rather conservative outlook for the potential verdict.
Ether ETF Rejection Inevitable?
According to Jan VanEck, the CEO of asset management firm VanEck, in a recent CNBC interview, the likelihood of an Ethereum ETF rejection is becoming clear.
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VanEck emphasized the unlikelihood of approval by the May 23 deadline for its application, which is one of the first in line for a verdict, predicting that the proposal and others will likely be rejected. “We were the first to file for Ethereum in the U.S., and Cathy Wood and I are kind of the first in line for May, I guess, to probably be rejected,” he stated.
Emphasizing the rationale behind the prediction, he explained that typical ETF approval processes, including those for Bitcoin ETFs, involve a flurry of engagement between issuers and the commission. This procedure is currently lacking in the ongoing Ether ETF review process.
“The way the legal process goes is the regulators will give you comments on your application, and that happened for weeks and weeks before the bitcoin ETFs — and right now, pins are dropping as far as Ethereum is concerned,” asserted the CEO.
Jan VanEck’s comments align with the fading excitement for a potential approval.
Ether ETFs Fate Uncertain
According to Bloomberg analyst Eric Balchunas, the prevailing pessimistic outlook among analysts and the absence of positive indicators around the eight Ether ETF proposals has diminished the once-promising approval odds to 25%.
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The compounding uncertainty also stems from reports that the regulatory commission is probing the Ethereum Foundation amid efforts to label the asset as a security.
The renewed debate has triggered a debate among industry watchers and analysts. While some argue that the SEC’s label purist approach kills the hopes for the investment vehicle, others assert that chair Gary Gensler lacks the authority to reclassify Ethereum as a security after it has long been considered a commodity.
Offering a glimmer of hope, BlackRock CEO Larry Fink, also vying for ETH ETF approval, recently asserted that approvals could still be granted if the SEC classifies Ethereum as a security.
The contrasting sentiment casts uncertainty over the proposals, and the outcome of the debate remains to be seen.
On the Flipside
- The SEC recently opened a 21-day comment window for Ethereum ETF filings from Grayscale, Fidelity, and Bitwise. However, the commission’s slow pace of action remains a concern.
- The regulatory standards against the industry, as reiterated by SEC Chair Gensler, could also impact the fate of ETH ETFs.
- While optimism may be waning, the SEC’s unpredictable nature makes predicting a definite rejection of Ethereum ETFs difficult.
Why This Matters
The VanEck CEO’s remarks regarding the probable rejection of Ethereum ETFs deepen the already fading optimism surrounding the proposal. Additionally, a negative outcome in the ongoing process could potentially set the industry back regarding regulatory standards.
Here’s more about the ongoing advocacy for Ether ETF approval:
Ethereum ETF Delays as US Lawmakers Demand Clarity from SEC
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