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Confidence that a Spot Ethereum ETF will be approved in the near term is fading in the face of growing skepticism. Tron Foundation founder Justin Sun expressed doubts about the possibility of a Spot Ethereum exchange-traded fund (ETF) being approved next month.
“My honest opinion (NFA) is that the Ethereum ETF will not be approved in May. We need to focus on helping people understand. But we're always here, right?'' Sun said in a recent post on X.
His comments reflect a broader sentiment within the industry that regulators have yet to fully grasp the fundamentals of cryptocurrencies.
The crypto industry has long been actively engaged with regulators, but progress feels stagnant. Sun is not alone in his frustration with the slow progress in regulating cryptocurrencies.
“Where the regulatory system has been less successful is when you try to analyze cryptocurrencies through the lens of traditional finance. You say, 'Well, is it like a security?' It's a commodity. mosquito? '…No, it's neither. It’s a cryptocurrency,” Bittrex Global CEO Oliver Lynch said in an interview with CNBC.
Skepticism is growing, especially after people involved in meetings with the SEC and issuers told Reuters that that was unlikely. Large financial institutions such as JPMorgan and Bernstein share this skepticism about the SEC's lack of interaction.
However, there is still some optimism. The involvement of BlackRock, which is known for its high success rate (576 ETF approvals, 1 rejection), has raised hopes for possible approval.
The grayscale perspective also offers some counterarguments. Craig Sahm, Grayscale's chief legal officer, believes the SEC's lack of involvement with the applicant is not a deal-breaker. He noted that the SEC is working with issuers during the approval process for Spot Bitcoin ETFs, and those solutions could also be applied to Ethereum.
1/ There has been a lot of talk about spots lately. #Ethereum ETF. Personally, I'm not daunted by that and think ETFs should be approved. But now I want to talk about how I think we should view the perceived “lack of SEC involvement” at this point.
— Craig Salm (@CraigSalm) March 25, 2024
SEC decisions on VanEck and ARK's filings are expected on May 23 and May 24. Approval would be a pleasant surprise given the prevailing pessimism, but a delay or rejection could impact the market in the short term.
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