Ether ETF Approval Prospects Dim as SEC Delays Decision Until Late May
The United States Securities and Exchange Commission (SEC) has postponed its decision on the proposed rule change applications for Ether exchange-traded funds (ETFs) from Hashdex and ARK 21Shares. The SEC announced the decision on March 19, just before the “third deadline” set by the agency for these applications [1]. Consequently, both Ether ETF proposals will now be subjected to a final decision in late May. ARK 21Shares’ application is scheduled for May 24, and Hashdex’s on May 30 [2].
Analysts voice pessimism over Ether ETF approval prospects
The optimistic outlook surrounding the approval of Ether ETFs has taken a turn for the worse, with analysts expressing increasing pessimism. Bloomberg ETF analyst James Seyffart has revised his outlook from cautiously optimistic to doubtful, citing a lack of engagement between the SEC and issuers as his reason for concern [3]. His sentiments were echoed by Eric Balchunas, another Bloomberg ETF analyst, who reduced the approval odds for Ethereum ETFs from 50% to 35% [4].
Public sentiment regarding the approval of Ethereum ETFs has also waned. Odds on platforms like Polymarket have dropped from 77% in January to a mere 32%, indicating decreased investor confidence [5]. With around $2.2 million wagered on the outcome of Ethereum ETFs, there is evident interest and concern among investors.
Grayscale considers adding staking to Ether ETF application
Amid the growing uncertainty surrounding Ethereum ETFs, Grayscale, a leading asset manager, has unveiled plans to enhance its spot Ether ETF application. In a “consent solicitation statement,” Grayscale outlined proposals to improve the trust’s capabilities [6].
One of these proposals involves allowing the trust to stake Ethereum held within it, enabling participation in proof-of-stake validation protocols and earning rewards in exchange for consideration. Grayscale asserted that staking Ethereum would help mitigate inflationary pressures from Ethereum’s proof-of-stake protocol and maintain parity with comparable investment products offering staking options.
The proposals put forward by Grayscale are subject to a vote, requiring the consent of over 50% of shares for approval. If ratified, Grayscale would follow in the footsteps of other issuers like ARK 21Shares, Franklin Templeton, and Fidelity, who have recently integrated Ether staking into their spot Ethereum ETF applications.
[1] SEC Postpones Decision on Ether ETFs, New Dates Announced for Final Ruling
[2] SEC Sets Final Decisions for Hashdex and ARK 21Shares Ether ETFs in Late May
[3] Bloomberg Analyst Downgrades Outlook on Ethereum ETF Approval Prospects
[4] Ethereum ETF Approval Odds Drop to 35% According to Bloomberg Analyst
[5] Polymarket: Ethereum ETF Approval Odds Plummet to 32% as Investor Confidence Wanes
[6] Grayscale Proposes Staking Ethereum Within Its ETF Application: What Does It Mean for the Industry?
Keywords: Ether ETF, SEC, approval prospects, analysts, odds, Grayscale.
