SEC Extends Deadline for Fidelity Ethereum ETF Decision to March 5
The U.S. Securities and Exchange Commission (SEC) has granted an extension to the deadline for deciding on Fidelity’s proposed Ethereum exchange-traded fund (ETF). The new deadline has been set for March 5, as indicated in a filing by the SEC on Thursday. This delay comes as the SEC also received five other applications for leveraged Bitcoin ETFs seeking approval.
Reasons for the SEC’s Delay in Approving Fidelity’s Ethereum ETF
The SEC has provided reasons for extending the deadline for deciding on Fidelity’s Ethereum ETF proposal. The commission states that it requires additional time to thoroughly evaluate the proposed rule change and associated issues. Fidelity submitted the application for the Ethereum fund in November, referencing a court ruling from the previous year which criticized the SEC for lacking a coherent reason to reject spot crypto ETFs while allowing futures-based products. Initially, the SEC had until January 20 to approve, reject, or initiate proceedings regarding the proposed rule change before choosing to extend the deadline using a provision allowing a 45-day extension.
Analyst Predicts Potential Approval of Multiple Spot Ether ETFs
Bloomberg ETF analyst James Seyffart had anticipated the delay in deciding on Fidelity’s Ethereum ETF proposal. Seyffart suggests that the significant dates to watch are in late May, pointing to the SEC’s final deadline of May 23 to approve or deny VanEck’s Ether ETF. He speculates that the SEC might approve multiple pending spot Ether ETFs simultaneously, similar to their approach with spot Bitcoin ETFs. Given that the SEC has already initiated proceedings on VanEck’s application, it cannot further delay its decision.
Optimism Grows for Approval of Spot Ethereum ETF Following Bitcoin ETFs’ Approval
The recent approval of 11 spot Bitcoin ETFs by the SEC has generated optimism in the market that approval for a spot Ethereum ETF is imminent. Stuart Barton, Co-founder at Volatility Shares, expresses confidence in the likelihood of a spot Ethereum ETF approval, citing the agency’s authorization of futures-based ETFs. Barton suggests that the SEC’s decision to allow the listing of futures-based ETFs indicates a similar approach to Ethereum as they have taken with Bitcoin. He infers that the commission likely considers Ethereum not to be a security and is not inclined to regulate it in that manner.
Direxion Enters the ETF Space with Five Bitcoin ETF Filings
While Fidelity awaits a decision from the SEC on its Ethereum ETF proposal, Direxion has filed for five Bitcoin ETFs. This move follows earlier filings by ProShares, which sought approval for five leveraged Bitcoin-tracking ETFs on January 16, and REX Shares, which filed for six leveraged Bitcoin ETFs on January 3. Direxion’s filing outlines plans for 1x, 1.5x, and 2x long leveraged Bitcoin funds, along with one short leveraged fund. The entrance of Direxion into the ETF space demonstrates the increasing interest and competition in providing investment vehicles for cryptocurrencies.
Analyst comment
Positive news: The SEC has extended the deadline for deciding on Fidelity’s Ethereum ETF, indicating the commission’s continued evaluation of the proposed rule change. This delay also comes as the SEC received five other applications for leveraged Bitcoin ETFs, showing increasing interest in cryptocurrency investment vehicles.
Market prediction: Given the SEC’s willingness to evaluate multiple ETF applications and its recent approval of Bitcoin ETFs, there is optimism that a spot Ethereum ETF approval is likely, potentially in line with the SEC’s approach to Bitcoin. The market for cryptocurrency ETFs is expected to grow with the increasing competition and interest from various companies.
