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Analyst Anticipates Spot Ethereum ETF Approval by Late May as SEC Delays Decision on Fidelity’s

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Fidelity’s proposal for a spot Ethereum exchange-traded fund (ETF) until March 5.

According to a filing on Thursday, the SEC cited the need for additional time to evaluate the proposed rule change and the associated issues thoroughly. Fidelity had initially applied for the Fidelity Ethereum Fund in November, referencing a court ruling from the previous year that questioned the SEC’s rationale for rejecting spot crypto ETFs while permitting futures-based products.

Notably, the delay had been widely anticipated, with Bloomberg Intelligence ETF analyst James Seyffart expressing his expectation on X, stating, “Fidelity #ethereum ETF delayed just now. Completely expected. Dates that really matter are late May, in my view.” Seyffart’s insight suggested that the crucial decisions regarding the Fidelity Ethereum ETF will likely transpire in late May.

Last week, TD Cowen analyst Jaret Seiberg noted that they anticipate the SEC will not approve ETFs for alternative crypto tokens, including Ethereum, “any time soon.” The reasoning behind this cautious approach is the SEC’s intention to gain experience from the recent approval of Bitcoin ETFs before extending the approval to other cryptocurrencies. He further noted that the expectation is that Ethereum and other crypto token ETFs may face a longer wait, possibly extending beyond the 2024 U.S. presidential elections scheduled for November. 

Notably, the SEC recently granted authorization for 11 spot bitcoin ETFs to commence trading, prompting speculation within the industry about the potential approval of a spot Ethereum ETF. Fidelity, entering the race for a spot Ethereum ETF alongside industry giants BlackRock and Grayscale, is thus poised to play a significant role in shaping the regulatory landscape for Ethereum-related investment products. 

Last week, Ethereum co-founder Joseph Lubin highlighted the significance of the SEC approving a spot Ether ETF, citing the inefficiency of existing financial instruments compared to ETFs. He distinguished Bitcoin and Ethereum, noting that while Bitcoin serves as a store of value or collateral currency, Ethereum is a commodity that powers transactions and storage on its network.

Recently, BlackRock’s CEO, Larry Fink, also expressed his endorsement for spot Ethereum exchange-traded funds (ETFs), coming on the heels of the triumphant launch of the asset management giant’s long-awaited spot Bitcoin ETF, stating he sees “value in having an Ethereum ETF.”

That said, following the latest development, investors are vigilantly monitoring potential shifts in the regulatory landscape. Notably, the approval of a spot ETH ETF could also serve as a catalyst, paving the way for approvals in the realm of other cryptocurrencies like Solana, XRP, and Cardano according to some experts.

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