VanEck is preparing for a potential rejection as the SEC’s decision on Ethereum spot ETFs looms.
In the ETF market, silence from the SEC prompts scrutiny and uncertainty. Multiple applications for spot Ethereum ETFs are currently awaiting SEC approval, and as the decision date nears, apprehension mounts. Both financial and crypto leaders express a mixture of skepticism and optimism.
A recent report from Barron’s highlights a persistently frustrating situation for ETF issuers. Unlike the constructive dialogue that facilitated the approval of spot Bitcoin ETFs, conversations between issuers and the SEC regarding Ethereum ETFs appear to be predominantly one-sided. This lack of engagement suggests a challenging path ahead for Ethereum ETFs.
While Barron’s remains skeptical, JPMorgan is optimistic, believing it’s a matter of “when” rather than “if.”
According to analyst Nikolaos Panigirtzoglou, the approval of a spot Ethereum ETF could still happen, but it might take longer than initially anticipated. He told The Block that ETF companies might resort to legal action against the SEC if their filings aren’t approved. “If there’s no spot Ethereum ETF approval in May, then we anticipate a litigation process after May,” Panigirtzoglou stated.
Panigirtzoglou suggested that such litigation would likely result in opposition to the SEC, akin to the scenario with Grayscale, ultimately compelling the SEC to approve spot Ethereum ETFs.
On the other hand, VanEck, one of the issuers of spot Ethereum funds, anticipates a flat-out rejection of the ETF filings. VanEck CEO Jan van Eck expressed in an interview with CNBC that VanEck and Ark Invest’s applications “are kind of the first in line for May…to probably be rejected.”
“575 to one”
For many fund managers, waiting in anticipation for the SEC’s response is a nerve-wracking ordeal. However, BlackRock may be better accustomed to this waiting game.
BlackRock boasts a remarkable track record of 575 ETF approvals with just one rejection. This exceptional success rate provides a favorable outlook for the asset manager’s spot Ethereum ETF application.
Recent attention has been drawn to Ethereum following reports of an investigation into the Ethereum Foundation by an undisclosed authority. Speculation suggests that this scrutiny, possibly from the SEC, aims to classify Ethereum’s native token, ETH, as a security.
Despite these speculations, BlackRock CEO Larry Fink remains optimistic about the possibility of a spot Ethereum ETF, even if ETH is deemed a security.
Jake Chervinsky, chief legal officer at Variant Fund, has suggested the possibility of BlackRock withdrawing its application. He points out that BlackRock’s success in ETF approvals stems from a collaborative approach with the SEC, rather than relying solely on aggressive tactics.