SEC Postpones Invesco Galaxy Spot ETH ETF, But Decision Still Expected in May

On February 6, the U.S. Securities and Exchange Commission (SEC) extended the decision period for the Invesco and Galaxy spot Ethereum ETFs.

The agency’s announcement specifically concerns Cboe BZX’s proposed rule changes that would allow the fund’s shares to be listed and traded.

The SEC said the proposed rule changes were published in the Federal Register on November 8, 2023, for comment. The SEC subsequently extended the time period within which it can approve, disapprove, and approve, specifying a longer period for approval of December 13, 2023. or initiate proceedings for approval or disapproval.

The agency’s latest filing indicates it has chosen the last option and has begun the process for approval or disapproval. The proceedings ask commenters to address fraud prevention, market manipulation, and investor protection. These issues are relevant to all other pending Ethereum ETF proposals and are also at the heart of the January spot Bitcoin ETF approval.

The SEC did not provide an exact deadline for today. It states that comments must be submitted within 21 days of publication in the Federal Register, and rebuttal comments must be submitted within 35 days of publication in the Federal Register.

SEC expected to make ETH ETF decision by May

This extension does not affect the broader approval schedule for the ETH ETF. Bloomberg ETF analyst James Seyffart acknowledged the delay. writing:

“(The) SEC just delayed (Invesco and Galaxy’s) Ethereum ETF. (This was) 100% expected and we will continue to see more delays in the coming months. Currently, the only date that matters for the Ethereum spot ETF is May 23rd. When is VanEck’s final deadline?”

The SEC will likely decide on several similar proposals simultaneously, including those with later deadlines than VanEck’s proposal.

The SEC has postponed various spot Ethereum ETFs over the past few weeks. The agency extended decision periods for applications from Fidelity on Jan. 18, BlackRock on Jan. 24 and Grayscale on Jan. 25. Once again, this delay does not affect the wider May decision deadline outlined by Seyffart.

It is unclear whether the SEC will approve a spot Ethereum ETF. One Polymarket prediction market currently suggests a 43% chance of approval by May. Seyffart suggested a 60% chance of approval by May, while one JP Morgan member suggested a 50% chance of approval. TD Cowen Research Group believes a spot Ethereum ETF will not be approved in May.