SEC Anticipated To Reject Spot Ethereum ETFs In Upcoming Decision, ETH Price Takes 5% Hit

Over the past 24 hours, Ethereum (ETH), the second largest cryptocurrency by market capitalization, has experienced a significant 5% decline. price fall. The decline comes amid mounting speculation that the highly anticipated Ethereum ETF is likely to be rejected by the U.S. Securities and Exchange Commission (SEC) before the upcoming May deadline.

US Bitcoin ETF Issuers Prepare for Expected SEC Denial

according to According to a recent Reuters report, various US Bitcoin ETF issuers and companies expect the SEC to reject their applications to launch ETFs that track the price of ETH.

Those expectations have been fueled by “demoralizing meetings” between applicants and regulators in recent weeks, according to four people familiar with the matter.

Prominent investment firms such as VanEck, ARK Investment Management, and seven other issuers have filed applications with the SEC to list ETFs that track the spot price of Ethereum.

In the first round, VanEck and ARK’s applications will receive SEC decisions by May 23 and May 24, respectively.

Sources involved in the talks between the two sides said: Bitcoin ETF The issuer and the SEC reported that discussions were primarily “one-sided” and that agency staff were not involved in substantive details regarding the proposed product.

This is in sharp contrast to the intensive and detailed discussions between issuers and government agencies that preceded the SEC’s landmark approval of the Spot Bitcoin ETF in January. be.

Issuers argued at the meeting that the SEC’s approval of a Bitcoin spot ETF and an Ethereum futures-based ETF in October set a precedent for spot. ETH products. We also sought to address potential regulatory concerns.

Despite their claims, the report notes that SEC staff did not identify specific concerns or engage in meaningful dialogue, suggesting they may have further denied the request.

Cryptocurrency industry setbacks

If these expectations come true, it would be a setback for the crypto industry, which had hoped that the approval of the Spot Bitcoin ETF would pave the way for similar products and contribute to the mainstream. Approved of cryptocurrencies.

The regulatory landscape is uncertain, with approval or rejection potentially delayed until late 2024 or beyond, said Todd Rosenbluth, head of ETF analysis at data firm Bettafi.

Although some issuers have expressed an intention to file additional disclosure documents to continue dialogue with the SEC, the overall sentiment is that there is growing confidence that filings will be made. is shown. was denied.

VanEck CEO Jan van Eck has already said the company’s application is likely to be rejected, but ARK Investment Management has not yet commented.

Rejected Ethereum ETF could spark legal battle

Several applicants expect the SEC to cite broader issues, such as the nature and depth of the underlying ETH market statistics, as reasons for its decision if the ETF is rejected.

Matt Hogan, chief investment officer at Bitwise Asset Management, which applied to invest in the Ethereum ETF, believes SEC oversight may take more time. ethereum futures Collect additional data.

Industry insiders have further speculated that rejecting the Ethereum ETF could lead to legal action, with one source saying courts could be involved before the Ethereum ETF ultimately becomes a reality. Suggests.

The expected rejection has already affected the price of Ethereum, with Hong Huang, president of cryptocurrency exchange OKX, saying the cryptocurrency is likely to fall as market participants consider the possibility of a negative outcome. He said he was under pressure.

The 1-D chart shows that the price of ETH is trending down. sauce: ETHUSD on TradingView.com

ETH is currently trading at $3,100, further underscoring the cryptocurrency’s sustained downtrend over a broader time frame. Over the past 14 and 30 days, the token has experienced significant declines of 12% and 14%, respectively.

Featured image from Shutterstock, chart from TradingView.com

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