Ether ETFs: A Looming Possibility in the US?

Not to be missed: As of April 12, 2024, there is still uncertainty surrounding Ether (ETH) ETFs in the United States. Although the Securities and Exchange Commission (SEC) was expected to decide in May, market hopes of approval are beginning to wane.

Professional Views

According to industry analysts David Lawant and Purvi Maniar of FalconX, a green light for ETH ETFs is expected, albeit it may take longer than expected. Their 12- to 18-month approval period depends on many variables:

Emulating the model established by Canada’s 2021 successful introduction of Ether ETFs.
The expanding global availability of Bitcoin ETFs (Europe, Singapore, Australia, Dubai).
Considering the impending US elections, there may be a change in regulation (the Republican Party is perceived as more crypto-friendly).

Current Situation

Unlike other Bitcoin ETFs introduced in recent months, the SEC has yet to approve a spot Ether ETF in the US. Investors are waiting impatiently for a judgment on this. Even if they are not explicitly advocating for a May approval, some analysts and investors present strong reasons against the conventional narrative of denial.

The chief legal officer of Grayscale suggested that the result is not always predictable in the absence of interaction. Unlike the BTC spot ETF approval procedure, there isn’t much to talk about right now. There was a lot of back-and-forth between the SEC and the issuers of BTC ETFs on the redemption mechanism (cash versus in-kind), but it is now a settled matter.

The one topic on which there might be disagreement is whether the SEC would permit native ETH staking. Most people believe that staking won’t likely be permitted at first, despite the pressure from certain issuers. That’s a simple problem that the SEC can address when it approves a prospective rule change or examines the S1 (or S3) forms that are necessary before launch.