The decision by the United States Securities and Exchange Commission (SEC) to delay the approval of the proposed spot Ether (ETH) exchange-traded funds (ETFs) from Hashdex and ARK 21Shares has been postponed. This decision, made on March 19, came just a few days before the “third deadline” set by the agency. Both ETF applications will now face a final decision in late May. The SEC’s final decision for ARK 21Shares will be on May 24, while Hashdex’s application will face the regulator’s ultimatum on or before May 30.
Analysts have recently become less optimistic about the approval of the eight currently proposed Ether ETFs. BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton are all among the issuers awaiting a decision. Bloomberg ETF analyst James Seyffart expressed his concerns about the lack of engagement between the SEC and the issuers, stating that his previously optimistic attitude towards ETH ETFs has changed.
Last week, Bloomberg ETF analyst Eric Balchunas revised the odds of Ether ETF approval from 50% to 35%. Balchunas compared the ETF process for Ether to the “reverse” of the spot Bitcoin (BTC) ETF race, citing the SEC’s lack of communication. Public sentiment has also declined, with the odds of Ether ETFs being approved by the end of May dropping to 32% on Polymarket, down from 77% in January.
In addition to ETFs, asset manager Grayscale is considering adding staking to its spot Ether ETF application. In a statement to investors, Grayscale outlined four proposals, including the ability to stake Ether held by the trust. This move aims to mitigate inflationary pressures resulting from Ethereum’s proof-of-stake protocol and maintain parity with similar investment products. The proposals will be subject to a vote and require the consent of over 50% of shares. If approved, Grayscale will join other issuers such as ARK 21Shares, Franklin Templeton, and Fidelity in offering Ether staking in their ETF applications.