A senior Bloomberg ETF analyst predicts that spot ethereum exchange-traded funds (ETFs) in the U.S. are unlikely to emerge this year. Despite the Securities and Exchange Commission (SEC) approving spot bitcoin ETFs, the same is not expected for Ethereum due to different regulatory considerations. The forthcoming U.S. election could further impact this scenario, potentially altering SEC leadership and influencing future cryptocurrency regulations.
Bloomberg Analyst on SEC Approving Spot Ether ETFs
A senior Bloomberg analyst specializing in exchange-traded funds (ETFs), Eric Balchunas, shared his insights on the potential approval of spot ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) in an interview with DL News, published Saturday.
Balchunas expressed skepticism about the prospects for spot ether ETF approvals by the May 23 deadline, citing limited engagement between the SEC and potential issuers. Furthermore, the uncertain regulatory status of ETH and the SEC’s investigation into the Ethereum Foundation complicate the situation. A recent court document revealed that the SEC is investigating ether as a potential security. SEC Chair Gary Gensler has refrained from clarifying whether ETH is a security, even when 48 lawmakers asked him.
Also Read: Ethereum Steals the Spotlight as SEC’s Approval of 11 Bitcoin ETFs Meets Tepid Market Reaction
After consistently rejecting spot bitcoin ETF applications, the SEC faced legal challenges from Grayscale in 2022. The agency subsequently approved 11 spot bitcoin ETFs in January. However, Balchunas doubts that this strategy will be successful for ethereum ETFs, noting that Grayscale is unlikely to sue the SEC over ethereum, and other potential issuers are reluctant to engage in legal battles with the regulator. Balchunas commented:
None of these other firms want to piss off the SEC … Grayscale was unique in that it wasn’t a big ETF issuer. The rest of these firms have other things going on, and they’re more scared … Nobody else will step up.
The upcoming U.S. election in November also factors into the equation. If former President Donald Trump secures a second term, there’s a high chance of a leadership change at the SEC, potentially resulting in a more crypto-friendly chair replacing Gary Gensler. This election outcome could significantly influence regulatory decisions concerning cryptocurrencies. Assuming a new chair takes office in April or May, and filings are promptly submitted thereafter, the deadline for approval or rejection could be around December 2025.
Balchunas opined:
If there’s a new president, you file again … Maybe you get approved. Or you sue. Either way, that will take a whole other year to play out.
Trump has recently encouraged support from crypto enthusiasts. Several analysts expect the price of bitcoin to rise if Trump returns to the White House, including Standard Chartered. However, the Bloomberg analyst cautioned: “Trump is not necessarily pro-crypto … Remember his previous SEC chief Jay Clayton didn’t allow that ETF either. So he’s not going to be like, ‘let’s just go crazy.’ But he’ll probably still be better for crypto and spot ETFs.”
Source: Bitcoin
