SEC Reviews Ethereum ETFs; Approval Uncertain Amid Market Concerns
The Essentials at a Glance
The US Securities and Exchange Commission (SEC) has initiated a public comment period for proposed amendments to Ethereum (ETH) ETFs by Bitwise, Fidelity, and Grayscale. Despite some crypto users’ excitement about this development, one industry analyst sees no reason for euphoria. The chances of approval for May remain low, while concerns about market manipulation and ETH staking linger. ETH recently recorded a price drop, reflecting the uncertainty in the industry.
Public Comment Period Opened
On April 3, 2024, the SEC launched the public comment period for proposed amendments to Ethereum ETFs from notable providers such as Bitwise, Fidelity, and Grayscale. This phase is expected to last 21 days. Although some crypto enthusiasts view this development as extremely positive for ETH, Bloomberg ETF analyst James Seyffart urges caution. He explains that the call for public comment is a standard procedure and does not necessarily indicate impending approval.
The Challenge of May Approval
The question of whether BlackRock could receive approval for its Ethereum ETF remains open. Analyst Seyffart considers the chances to be slim but does not rule out a surprise. Sam Enzer, partner at Cahill Gordon and Reindel, expresses concerns about the risks of market manipulation and highlights that ETH staking could be one of the SEC’s biggest concerns. These factors could lead to the rejection of the applications in May.
ETH Price Under Pressure
Amid the uncertainty surrounding the ETF approvals, the price of Ethereum has experienced a 9% weekly decline, from $3645 USD to $3200 USD. This drop is partly due to the sharp fall in Bitcoin (BTC). If the current macroeconomic strains persist, the price of ETH could further fall to the psychologically important mark of $3000 USD.
Our Assessment
The SEC’s opening of the public comment period for Ethereum ETFs is a significant step but should not be overestimated. The actual chances of approval in May remain low, especially given concerns about market manipulation and ETH staking. The recent drop in ETH price reflects the prevailing uncertainty in the industry. Investors should remain cautious and closely monitor developments.
Sources: AMBCrypto, Benjamin Njiri, Saman Waris
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