Multiple review decisions have been postponed again. Is it a certainty that the Ethereum spot ETF will be rejected?

Author: Nian Qing, ChainCatcher

On March 19, local time, the U.S. Securities and Exchange Commission (SEC) announced another postponement in two notification documents The decision-making time of two Ethereum spot ETFs is extended the decision-making time for the Hashdex Nasdaq ETH ETF application to May 30, 2024, will ARK 21Shares Ethereum ETF The application resolution has been postponed to May 24, 2024.

The U.S. Securities and Exchange Commission (SEC) said in a notice: "The Commission believes that in order to ensure sufficient time to consider the proposed rule changes and related issues, specifying a longer period for issuing approval or disapproval An order approving the proposed rule change is appropriate." The SEC emphasized the importance of the deliberative process to ensure that all aspects are fully considered. Such an initiative could help the Commission more fully assess the impact of potential rule changes on the market and investors, thereby making decisions with greater depth and breadth. The SEC previously reported that on March 4, the SEC postponed its decision on BlackRock’s application for iShares ETH Trust and Fidelity’s application for its Ethereum ETF.

Although this postponement was expected, it still had a certain impact on market sentiment and prices. According to RootData market data, Ethereum fell below $3,200, with an intraday drop of more than 10%.

According to Bloomberg’s ETF analyst James Seyffart, he said on social media that at least three more Ethereum ETFs are expected to be postponed in the next two days. VanEck, Ark/21Shares, Hashdex, and Grayscale all plan delayed launches within the next approximately 12 days. Seyffart previously noted that the postponement of all ETF review decisions may last until May 23.

In addition, He also said: “In recent months, my cautiously optimistic attitude towards the ETH ETF has changed. We now believe that these applications will eventually be accepted in the May 23rd round. Denied. The U.S. SEC has not yet communicated with the issuer on specific matters regarding Ethereum. It is completely opposite to the situation when the Bitcoin spot ETF application was made last fall. ”

In the past few weeks, the market has Optimism about the approval of the Ethereum spot ETF application continues to decline. Bloomberg ETF analyst Eric Balchunas also recently lowered the likelihood of an Ethereum spot ETF being approved in May to 30% from about 70%. Data shows that Ethereum’s one-month bullish-bearish skewness has turned negative, suggesting relative strength in put options. Previously, Ethereum’s 60-day indicator also had a bearish bias, while the 90-day and 180-day indicators remained positive. In its latest market insight article, QCP Capital explains that investor interest in near-term Ethereum put options may stem from the diminishing likelihood of the U.S. SEC approving an Ethereum spot ETF in May.

It is understood that Ethereum spot ETF has four review periods (45 days, 45 days, 90 days and 60 days). Once an institution submits a new ETF application, the SEC will register the application in the federal registration On the Federal register, the 240-day cycle starts from the day of registration. When the deadline for each stage comes, the SEC must respond: pass, deny, or delay review. If there is no resolution on the first date, it will be postponed to the second date. Until the deadline is reached, the SEC must make a final resolution. In other words, As the earliest deadline for VanEck to apply for the Ethereum spot ETF, May 23 will be a key date, and whether it is passed or not will also directly affect the resolution results of other applications .

Currently, seven entities are applying for Ethereum ETFs, namely: BlackRock, Fidelity, Invesco&Galaxy, Grayscale, VanEck, 21Shares &Ark and Hashdex. The SEC approval period for each fund is as shown in the following table:

Although other sources such as Matt Hougan, global head of research at Bitwise, have previously predicted that the likelihood of the Ethereum spot ETF being approved in May is close to 50% or even higher, and has already Compared with the listed Bitcoin spot ETFs, the Ethereum spot ETFs still have certain "risks". In public filings, the SEC has said: “There are unique concerns about whether certain characteristics of Ethereum and its ecosystem, including its proof-of-stake consensus mechanism and the concentration of control or influence of a few individuals or entities, make Ethereum susceptible to fraud and manipulation. point?"

As BloFin recently released " Should we be prepared for the rejection of Ether spot ETF? " mentioned in "Compared with spot Bitcoin ETFs, the negative impact of the PoS mechanism, price manipulation risks and securitization risks significantly reduce the probability of approval of spot ETH ETFs.

The continuous rise in the crypto market some time ago may have raised our expectations for this result. This decline can somewhat allow us to return to calmness, and at least be prepared for the rejection of the Ethereum spot ETF.

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