SEC Takes ‘Strong Opposition’ To Spot Ethereum ETF, But Issuer Is Optimistic: FOX Reporter

FOX Business reporter Eleanor Terrett reports widespread anticipation regarding the approval of a spot Ethereum ETF. January 23.

Specifically, Terrett suggested that the U.S. Securities and Exchange Commission (SEC) would oppose approving a spot Ethereum ETF. She said:

“Another source says that at this very moment the SEC’s position is ‘firmly opposed’ and there is currently ‘some internal resistance’ to the idea.”

Terrett did not say whether the source was an SEC member or a member of an asset manager seeking SEC approval.

Terrett also noted that SEC Commissioner Hester Peirce, known for her pro-crypto stance, advocated for a simpler decision process. As SEC Chairman Gary Gensler explained in a statement, the SEC approved the spot Bitcoin ETF in part because one of its applicants, Grayscale, secured a legal victory. Peirce criticized this approach today in an interview with cryptocurrency news platform Coinage, saying ETF approval should involve “regular considerations” rather than mandatory court action.

Terrett concluded that further signs of the SEC’s position will emerge in the coming months as it becomes clear whether the SEC will engage with the S-1 registration statement. The SEC typically posts notices of meetings with asset managers and exchanges on each ETF’s page.

Asset managers appear optimistic

Despite opposition within the SEC, Terrett suggested that the asset managers responsible for issuing each fund are optimistic about approval.

According to Terret:

“(One) issuer that applied for an ETH spot ETF said they were confident that Bitcoin spot approval and a smooth launch would lead the (SEC) to approve the ETH spot ETF.”

Another unnamed issuer said he expects a spot Ethereum ETF to launch by the end of the summer due to the SEC’s early approval of an Ethereum futures ETF and BlackRock’s strong track record of ETF approvals.

The source also cited comments from the CFTC suggesting that Ethereum is a commodity and Ripple’s partial legal victory over the SEC as factors that could hinder the SEC’s classification of cryptocurrency assets as securities more broadly. However, it is unclear whether these developments will directly impact the approval of a spot Ethereum ETF in the coming months.

Public expectations of approval vary. Bloomberg ETF analyst Eric Balchunas assume There is a 70% chance that a spot Ethereum ETF will be approved in May, with JP Morgan executive Nikolaos Panigirtzoglou predicting a 50% chance of approval. Polymarket odds suggest a 53% chance of approval.