SEC Delays Decision on Invesco Galaxy Ethereum ETF

Key Takeaways:

The SEC has moved its decision on Invesco’s proposed spot ether ETF to July 5, 2024.

Optimism surrounding the possibility of SEC approval for these products has decreased in recent months.

The U.S. Securities and Exchange Commission (SEC) has postponed its ruling on the Invesco Galaxy Ethereum ETF to July 5, 2024.

This extension will provide the agency with more time to thoroughly evaluate the ETF proposal and resolve any related issues.

The SEC recently extended the review period for Galaxy Invesco’s Ethereum ETF application by another 60 days, citing the need for proper consideration of the proposal and related issues.

These delays reflect the ongoing complexity of regulatory actions and their impact on cryptocurrency markets.

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The delay follows a similar pattern of delays as the SEC previously postponed a decision on the ETF and solicited public feedback in February.

Similar extensions have been granted to other spot Ethereum ETF offerings in recent weeks from major financial institutions including Grayscale, Franklin Templeton, VanEck, and BlackRock.

Optimism surrounding the approval of a spot Ethereum ETF has waned and industry analysts have adjusted their expectations accordingly.

Bloomberg ETF analyst Eric Balchunas noted that the likelihood of SEC approval had dropped significantly, from about 70% to 25% by the end of May. This change in sentiment reflects broader market sentiment that maintains a desire for innovative financial products while grappling with regulatory uncertainty.

Additional skepticism from financial analysts such as Michaël van de Poppe and MicroStrategy CEO Michael Saylor also added to the uncertainty. Their cautious outlook highlights the regulatory hurdles that will need to be overcome for Ethereum ETF approval in the near term.

The announcement comes as industry giants such as Cboe Global Markets and Bitwise seek SEC approval to file filings.

May 23 is the final deadline to apply for VanEck’s Ether ETF, which analysts are suggesting is a pivotal date. But Bloomberg ETF analyst James Seyffart and others have significantly downgraded the chances of approval, citing ongoing regulatory ambiguity.

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Todd Rosenbluth, head of ETF analysis at VettaFi, expected further delays, suggesting approval could be delayed until 2024 or later due to the uncertain regulatory environment.

As the cryptocurrency market develops, regulatory decisions by organizations such as the SEC will have a significant impact on its trajectory. Currently, the community is looking forward to a regulatory structure that promotes innovation while maintaining market stability and protecting investors.