A couple of days ago, ETF expert and Bloomberg analyst Eric Balchunas stated that he believes it is likely that the approval of Ethereum spot ETFs by the SEC will be postponed until 2025.
He stated this during an interview given to DL News.
Summary
Bloomberg analyst’s hypothesis: will the SEC delay Ethereum ETFs in the USA?
Balchunas has recently become famous in the crypto sector for telling step by step the landing on the stock exchange of Bitcoin spot ETFs.
His forecasts on the matter have generally proven to be correct.
Regarding the requests received by the SEC regarding the issuance of an ETF on Ethereum spot, it is believed that there is a high probability that in May the SEC will opt for a denial.
By May 23, in fact, the deadlines for the agency’s pronouncement on the requests submitted earlier will expire.
According to Balchunas, it may also be necessary to wait until the end of 2025 for final approval.
The unknown factor of elections
This year in the USA presidential elections are being held.
The voting will take place on November 5th, and depending on the outcome, things could take two different directions.
In the first case, that is a reconfirmation of Joe Biden’s current democratic presidency, applicants for the issuance of an ETF on Ethereum could sue the SEC, as Grayscale did a few years ago, which eventually won the case effectively forcing the SEC to approve ETFs on Bitcoin spot.
If, on the other hand, the Republican Donald Trump were to win, a change of guard at the top of the SEC would be likely, with Gary Gensler probably replaced by someone less opposed.
In this case, the applicants may simply submit a new request, hoping that the new SEC presidency will be less hostile.
Note that, in case of Trump’s victory, the appointment of the new SEC president will not come before 2025, and could even arrive only in the spring.
So far this seems to be the most likely option.
It is possible that we will have to wait for about a year before someone submits a new request to the SEC for the issuance of an ETF on Ethereum spot, and therefore the final approval may not come before the end of 2025.
Bloomberg: The potential SEC lawsuit for Ethereum ETFs
According to what Balchunas claims, companies that would like to issue an ETF on Ethereum spot may want to avoid suing the SEC.
Indeed, in addition to the uncertainty about winning, there is also the high cost of a lawsuit against the SEC.
Therefore, the most likely thing is that they are waiting for the outcome of the elections before making such a decision.
It should not be forgotten that there is an additional issue regarding the Ethereum question.
In fact, if there was no doubt about the nature of Bitcoin as a commodity, not even from the SEC, on Ethereum instead the current SEC led by Gensler supports the hypothesis that ETH should be considered an unregistered security.
If a judge were to recognize this theory, no spot ETH ETF could be approved in the USA.
So broadcasters will have to wait until November to understand if they will be forced to sue the SEC, risking losing, or if they can simply reapply in 2025.
ETFs in China
It is worth noting that at the end of April, both ETFs on Bitcoin spot and other ETFs on Ethereum spot landed on the Chinese stock exchange in Hong Kong.
Therefore, in the event of a change in leadership at the SEC in 2025, the hypothesis that the agency may approve what was rejected in 2024 appears plausible.
It should be noted, however, that ETFs on BTC and ETH spot in China have not been very successful, also because they have only been made available to the 7 million residents in Hong Kong, and not to the remaining 1.4 billion Chinese.
Just think that the China Amc Ether ETF recorded a trading volume in USD of about $165,000 on the day of its launch, and then in the following days it never exceeded $50,000.
These are really discouraging data, also because instead the China Amc Bitcoin ETF in USD debuted with more than $400,000, and then even exceeded one million dollars.
So the trading volumes of ETH spot ETFs in Hong Kong are only just over a tenth compared to those of BTC, and this discrepancy could also be reflected in US exchanges.
In other words, it is not worth incurring huge expenses to bring ETFs on ETH spot to the US stock exchanges, while for those on BTC the game was worth the candle. Let’s not forget that Bitcoin ETFs on US stock exchanges have been a real success.
