Ethereum ETF Applications Likely to Be Denied! May Approval Highly Unlikely

The Securities and Exchange Commission (SEC) has announced that it will extend its decision timeline for the approval of the Hashdex Nasdaq Ethereum exchange-traded funds (ETFs). This decision has generated a lot of speculation and anticipation in the market, as the approval of these ETFs could have a significant impact on the crypto investment landscape.

According to a notice filed by the SEC on March 19, the decision on the Hashdex ETFs will now be postponed until May 30, 2024. The SEC stated that it requires additional time to consider the proposed rule change and the issues raised in relation to the ETFs.

The proposed rule change for the Hashdex Nasdaq Ethereum ETF was initially filed in September 2023, and since then, it has gone through various stages of the regulatory process. The SEC has the authority to extend the timeline for consideration, and it has also instituted proceedings to determine whether to approve or disapprove the ETFs.

While there is optimism among analysts regarding the approval of these ETFs, there is also a sense of caution and skepticism. Bloomberg ETF analysts Eric Balchunas and James Seyffart have both expressed doubts about the approval timeline.

Seyffart, who had previously been optimistic about the ETFs, now believes that they will be denied in this round. He tweeted, “My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round.”

Balchunas also acknowledges a decrease in the likelihood of spot Ethereum ETFs being approved by the May deadline. However, he still believes that there is a possibility of approval in the long term.

In addition to the Hashdex ETFs, Grayscale has also made a proposal to incorporate staking into its spot Ether ETF application. This proposal is subject to a vote among stakeholders, and if approved, Grayscale will join other issuers in integrating staking into their spot ETF applications.

Overall, the approval prospects for Ethereum ETFs remain uncertain. The SEC’s decision to extend the timeline and the fluctuating market sentiment add to the uncertainty surrounding the approval of spot Ethereum ETFs.