Approval Date for Ethereum ETFs Expected
The Securities and Exchange Commission (SEC) is likely to follow a similar approach to approving spot Bitcoin (BTC) exchange-traded funds (ETFs) for spot Ethereum ETFs. Standard Chartered Bank analysis suggests that approval will be granted on the initial final deadline of May 23.
Delays Possible, Approval Still Likely
According to a report by The Block, Geoffrey Kendrick, head of forex and digital asset research at Standard Chartered Bank, expects pending applications for spot Ethereum ETFs to be approved on May 23. This date is considered the equivalent of January 10 for Bitcoin ETFs.
Kendrick predicts that if Ethereum prices follow a similar trajectory to Bitcoin leading up to ETF approval, Ethereum could trade as high as $4,000 by the specified date.
Support for Approval
Kendrick’s prediction is based on the SEC’s classification of ether as a non-security in its legal actions against crypto companies. Additionally, Ethereum is listed as a regulated futures contract on the Chicago Mercantile Exchange (CME), which adds weight to the expectation of approval.
Regulatory Path for Ethereum ETFs
Financial lawyer Scott Johnsson discussed the potential roadmap for Ethereum ETFs. He emphasized that while long-term approval is highly likely, there may be short-term delays due to ongoing regulatory actions involving Coinbase/Binance securities exchanges.
Shorter Path for ETH ETF Approvals?
Johnsson highlighted the regulatory path from a plain spot digital asset to a spot ETF offering, using Bitcoin as an example. He noted that the process for Bitcoin took seven years, involving multiple steps and disapprovals along the way.
However, Johnsson believes the timeline for Ethereum is compressing, with applications open for both futures ETFs and spot ETFs. He suggested certain prerequisites may no longer be necessary for spot approval, such as Step 3, which requires the SEC to issue a formal 19b-4 approval for the futures ETF.
SEC’s Approach to Future Approvals
Johnsson highlighted two key factors to understand the SEC’s current approach to future approvals, including Ethereum. Firstly, he discussed the threshold question in the context of the Grayscale ruling, which focused on correlation analysis.
Secondly, Johnsson emphasized the SEC’s view, as bounded by the recent BTC approval order, which considers correlation with the CME, a lengthy sample period, intra-day trading data, and consistency throughout the sample period.
Approval Expected Soon
Once the required level of correlation is achieved, Johnsson believes that approval for spot Ethereum ETFs is likely to follow shortly after that, with May being the expected month of approval.
Overall, industry analysts and experts suggest that the SEC’s approval of spot Ethereum ETFs is a matter of time, barring any major legal shifts.