The U.S. Securities and Exchange Commission (SEC) is expected to reject applications for spot Ether ETFs (exchange-traded funds) next month, according to industry sources. This news comes after a series of discouraging meetings between the SEC and issuers in recent weeks.
Sources familiar with the discussions, who wished to remain anonymous due to their confidentiality, reported that the meetings lacked substantive engagement from the SEC. The agency staff reportedly offered little feedback on the proposed Ether ETF products, leading issuers to believe their applications will be denied.
This decision could significantly impact the U.S. cryptocurrency market. Spot Ether ETFs would allow investors to gain exposure to Ethereum, the world’s second-largest cryptocurrency, through a regulated investment vehicle. Their approval was anticipated after the SEC greenlit several Bitcoin ETFs earlier this year.
However, the SEC appears to have different concerns regarding Ether. Unlike Bitcoin, Ethereum’s underlying technology, the Ethereum blockchain, facilitates various applications beyond just a store of value. This complexity might be a sticking point for the SEC, which is concerned about potential market manipulation and custody risks associated with Ether ETFs.
The denial of these applications would be a setback for the cryptocurrency industry in the U.S. It would limit investor options for accessing Ether and could dampen overall market enthusiasm. However, some analysts believe it’s only a matter of time before the SEC approves Ether ETFs as regulations evolve and the agency gains more comfort with the cryptocurrency market.
Meanwhile, investors eagerly await the SEC’s official decision, which is expected sometime next month. The outcome will have significant implications for the future of Ether investing in the United States.
