The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Fidelity's proposal for Ethereum Exchange Traded Funds (ETFs). Alongside this, the regulator is also considering five new applications for leveraged Bitcoin ETFs. The SEC extended its review period for these proposals by an additional 45 days, aiming to allocate ample time for evaluating the proposed rule changes and addressing any concerns. This extension sets March 5 as the new decision date.
Bloomberg ETF analyst James Seyffart, in a tweet dated January 18, expressed his anticipation of this delay. Seyffart pointed out that a more crucial date would be May 23, the deadline for the SEC to make a decision on the VanEck Ethereum ETF. He and other analysts speculate that the SEC might simultaneously approve several pending spot ether ETF applications, similar to its earlier approval of a spot Bitcoin ETF.
On January 18, Direxion filed applications for five Bitcoin ETFs with the SEC. This move came just days after ProShares applied for five leveraged Bitcoin tracking ETFs on January 16, and REX Shares submitted applications for six leveraged Bitcoin ETFs on January 3. Direxion's proposal includes plans for 1x, 1.5x, and 2x long leveraged Bitcoin funds, as well as a short leveraged fund.
Bloomberg ETF analyst Eric Balchunas commented on this development in a January 18 post, noting the growing number of leveraged Bitcoin ETF applications. He remarked that it's unprecedented to have more leveraged Bitcoin ETFs than long ones in the market. The SEC's stance on the approval of a spot Ethereum ETF remains a topic of debate among industry experts.
Balchunas earlier told Cointelegraph that he believes there is a 70% chance of an Ethereum spot ETF being approved in May, especially considering the SEC’s deadline for reviewing the VanEck fund. However, Mark Yusko, co-founder and CEO of Morgan Creek Capital, expressed a differing opinion. He noted that despite the SEC's approval of a Bitcoin ETF, the regulator remains generally wary of cryptocurrencies. Yusko also raised concerns that the SEC might classify Ethereum as a security, contrasting with Bitcoin, which SEC Chairman Gary Gensler has previously referred to as a commodity.
