Why the US Election Could Determine the Future of Ethereum ETFs
The destiny of Ethereum spot exchange-traded funds (ETFs) in the United States seems to rest on the outcome of the impending presidential election. This anticipation arises as there is a growing expectation that the Securities and Exchange Commission (SEC) will reject current applications for Ethereum spot ETFs on May 23.
Experts such as Bloomberg Intelligence analyst Eric Balchunas have expressed pessimistic sentiments regarding ETH ETF approvals this month, citing the SEC’s limited interaction with issuers and Ethereum’s uncertain regulatory status.
Furthermore, they argue that the ongoing SEC investigation into the Ethereum Foundation further fuels skepticism. Balchunas suggests that the approval of spot Ethereum ETFs could be postponed until at least the end of 2025.
Upon potential rejection this month, prospective issuers like BlackRock, Fidelity, and Ark Invest face two challenging options: either following Grayscale’s path and suing the SEC over the denial or waiting and reapplying later.
Meanwhile, the upcoming U.S. election could significantly impact the situation, especially with the potential re-election of Donald Trump. Trump has previously stated in a CNBC interview in March that his administration would support Americans using Bitcoin for transactions and assured that his government wouldn’t crack down on cryptocurrency.
Given Trump’s favorable stance on crypto, Balchunas noted, “If there’s a new president, you file again. Maybe you get approved. Or you sue. Either way, that will take a whole other year to play out.” In essence, the upcoming election marks a crucial turning point for the future of Ethereum ETFs.
Regarding potential legal actions, despite Grayscale’s successful lawsuit against the SEC for Bitcoin spot ETFs, a similar legal battle for Ethereum ETFs seems improbable. Grayscale has already witnessed significant outflows exceeding $12 billion after converting its Bitcoin trust into an ETF. Therefore, the firm might be reluctant to engage in another costly legal dispute. Additionally, other issuers are cautious about antagonizing the SEC, as stated by the Bloomberg analyst, “None of these other firms want to piss off the SEC. Nobody else will step up.”
With Trump potentially returning to office, the crypto community anticipates that he would nominate a more favorable SEC chairman compared to Gary Gensler. If a new SEC chair is appointed by mid-2025 and filings are promptly resubmitted, the approval process could extend to December 2025.
Disclaimer: The content provided in this article is solely for informational and educational purposes. Crypto News Online Hub assumes no liability for any losses arising from the use of information, products, or services referenced herein. Readers are urged to proceed with caution and conduct thorough research before making any decisions related to the subject matter discussed.
