The United States Securities and Exchange Commission (SEC) Commissioner Hester Peirce, often called “Crypto Mom” for her positive stance on cryptocurrencies, shared insights concerning Ethereum in a recent interview with Coinage Media.
Peirce suggested that the US SEC might not require a lawsuit to guide its decision on approving Ethereum spot ETFs.
SEC Commissioner’s Optimistic Outlook On Ethereum ETFs
Peirce referenced the Grayscale court ruling, instrumental in the SEC’s approval of spot Bitcoin ETFs. She emphasized that the US SEC should not wait for court interventions to rectify its approach, acknowledging that the regulatory body’s actions have been “arbitrary and capricious.”
The SEC Commissioner noted in the interview:
We shouldn’t need a court to tell us that our approach is ‘arbitrary and capricious’ in order for us to get it right […] There’s a lot of work that goes into getting an exchange-traded product ready for market, including making sure that the disclosures are lining up with how the product actually works […] Having heard from a court that the approach we were taking was wrong […] I think that kind of a lesson will certainly stick with us.
This acknowledgment signals a potential openness to applying the same precedent to future Ethereum ETF applications, albeit with a recognition that each application’s specific facts and circumstances can vary greatly. However, a single Commissioner can’t determine the decisions of the entire body.
The US SEC recently extended its decision timeline for Fidelity’s proposed Ethereum spot ETF. On January 18, 2024, the SEC announced a 45-day extension to review the proposal more thoroughly.
— James Seyffart (@JSeyff) January 18, 2024
According to the SEC, this delay ensures “sufficient time to consider the proposed rule change and the issues raised therein.”
Chances Of An Ethereum Spot ETF Approval
Notably, the crypto community remains cautiously optimistic. Analysts like Bloomberg’s Eric Balchunas have suggested a 70% likelihood of an Ethereum spot ETF approval by May, especially considering the “multiple applications pending review.”
So far, several prominent financial firms, including BlackRock, ARK 21Shares, VanEck, Invesco Galaxy, Fidelity, Hashdex, and Grayscale, are contenders in the race to obtain the US SEC approval for their respective spot Ethereum ETF proposals.
Digital asset lawyer Joe Carlasare demonstrated confidence in approval within the year, citing the existing ETH futures trading on the Chicago Mercantile Exchange (CME) and the high correlation of ETH futures to the spot market.
Carlasare points out that the SEC’s approval of spot Bitcoin ETFs hinged on the presence of a regulated futures market, arguing that a similar rationale should apply to Ethereum.
In my opinion, the analysis of the SEC in its approval of the spot Bitcoin ETFs all but guarantees an approval of a ETH spot ETF for the following reasons:
1. ETH Futures are already trading on the CME.
2. The SEC has already approved ETH futures ETFs.
3. The CME has identical… pic.twitter.com/bCSUymdc6e
— Joe Carlasare (@JoeCarlasare) January 15, 2024
Featured image from Unsplash, Chart from TradingView