Pessimism surrounding Spot Ethereum ETFs approval is set to increase as the United States Securities and Exchange Commission (SEC) has opted to delay its decision on the approval process of Invesco Galaxy’s ETH Spot ETF, fueling uncertainty in the crypto market.
SEC Pushes Back Invesco’s Ethereum Spot ETF
In October last year, Invesco Galaxy filed a proposed rule change to list and trade shares of its Ethereum spot ETF, Commodity-Based Trust Shares, with the SEC under the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, which was published in the Federal Register in November.
Invesco Galaxy’s Ethereum Spot ETF aims to reflect the performance of the spot price of Ether, by retaining ETH units with a different custodian. The document indicated that Invesco is the sponsor and Galaxy Digital is the execution agent, which is responsible for selling ETH to cover the Trust’s costs. However, according to a Monday filing, the Commission has decided to postpone its decision on the company’s proposal.
The SEC declared that additional time is needed to analyze the related concerns and the proposed rule change, stressing the need for more time to fully assess the spot ETF proposal. Thus, the regulatory watchdog has given an additional 60 days to approve or disapprove the proposal.
The filing read:
The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.
Given that the SEC has 240 days overall from the publishing date to make extensions before reaching a final decision to approve or disapprove the application, the agency is expected to issue a final decision on Invesco Galaxy’s Ethereum Spot ETF by July 5, 2024.
Invesco Galaxy is the latest asset management company to see its Spot ETF proposal being delayed by the agency. Other notable companies like Blackrock have also encountered the same fate over time.
Blackrock’s proposed Spot Ethereum ETF was delayed in March, marking the second time the Commission has postponed the firm’s proposal. This repeated delay from the SEC thus far has cast a dark shadow on the exchange products within the crypto community.
ETH Spot ETFs See Pessimism From Top Crypto Figures
Over time, Ethereum Spot ETFs have seen constant negative sentiment from top figures in the crypto space, unlike Bitcoin, which saw unwavering optimism from these figures. Last Month, Tron Founder Justin Sun expressed his disbelief in the products getting approved by the May 31 deadline. “My honest opinion (NFA) is that an Ethereum ETF won’t be approved in May,” he stated.
Sun claims the crypto industry still needs to prepare for a drawn-out education process in order to help authorities and regulators understand cryptocurrency, even though he believes the industry has already reached this stage.
Currently, the likelihood of acceptance of the ETH Spot ETFs now stands at a mere 12%, which is a significant decline from the 76% odds recorded in January following the approval of Bitcoin spot ETFs.
Featured image from iStock, chart from Tradingview.com
