Ethereum Dips as SEC Meetings Slim ETH ETF Approval Chances

• Court filings and nine applicant meeting reports paint a grim picture of ETH ETFs.
• The Securities and Exchange Commission (SEC) assumes ETH is a security.
• Industry leaders call for regulation despite “discouraging” meetings with SEC.

The largest Proof of Stake (PoS) blockchain, Ethereum (ETH), dipped this Monday by 4.20% after Reuters leaked evidence that the Securities and Exchange Commission (SEC) is stalling the approval of ETH exchange-traded funds (ETFs).

Four people related to the matter disclosed that the multiple meetings regarding the upcoming ETH ETF products were “discouraging” and “one-sided.” This comes just five days after the SEC delayed its decision on Franklin Templeton and Grayscale’s proposed Ether ETFs.

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In addition, the latest court filings show that the SEC believes Ethereum to be a security and aims to regulate the asset despite uncertain jurisdictional territory. VanEck and ARK Invest are waiting for the SEC to decide on their ETH ETF products by May 23 and 24, 2024. There was reported to be no constructive dialogue between the potential ETH ETF issuers and the SEC.

Top Industry Players Share Similar Sentiment

According to many industry experts, as the cryptosphere awaits a historic decision from the SEC, the odds are stacked against Ethereum’s ETF launch. For instance, Bloomberg’s Senior Financial Analyst Eric Balchunas rings the alarm on American regulator’s behavior:  “The SEC hasn’t engaged, no comments, no nothing. Radio silence = violence.”

Tron’s founder, Justin Sun , is known for his ETH buying sprees, but even he forecasts an ETH ETF rejection by the SEC in May 2024. “The crypto industry still needs to prepare for a long-term education with regulators,” remarked Sun, implying that regulators haven’t yet fully grasped blockchain as a disruptive technology. 

Following the developments, Ether slumped by 4.20% to trade at $3,179 as of press time. Dropping 10.2% of its value over the past 30 days, ETH is 35% down from its all-time peak, set at $4,878.26 on November 10, 2021. With a high price correlation with Bitcoin (BTC), ETH brought about 66% yearly returns compared to BTC’s 114%.

On the Flipside

• VanEck and Ark Investment argue that the SEC approved ETH Futures ETFs in October 2023, followed by Bitcoin Spot ETF approval on January 10, 2024.

Why This Matters

The applicants for Ethereum exchange-traded fund (ETF) are striving for clear crypto regulation via products that can be adopted in traditional finance.

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