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Fidelity Ethereum ETF Awaits SEC Verdict, Analyst Eyes Late May for Approval

The U.S. Securities and Exchange Commission (SEC) has extended its review period for the Fidelity Ethereum Fund, as indicated in a recent filing. This delay stems from the SEC’s need for more time to comprehensively evaluate the proposed rule change and its implications.

Fidelity had initially submitted the application for its Ethereum-based fund in November, referencing a court ruling that highlighted inconsistencies in the SEC’s approach to rejecting spot crypto ETFs while approving futures-based products.

Bloomberg Intelligence ETF analyst James Seyffart, commenting on the development, anticipates that significant decisions regarding the Fidelity Ethereum ETF are likely to be made by late May, aligning with the broader expectations of the market.

SEC Delays Review on Fidelity’s Ethereum ETF Proposal

The U.S. Securities and Exchange Commission (SEC) has extended the review period for Fidelity’s proposed spot Ethereum exchange-traded fund (ETF) to March 5. This decision, revealed in a recent filing, arises from the SEC’s requirement for more time to conduct a detailed evaluation of the proposed changes and related issues.

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Fidelity’s application for the Ethereum Fund, filed in November, was partly based on a previous year’s court ruling that called into question the SEC’s policy of rejecting spot crypto ETFs while approving futures-based variants.

This postponement by the SEC was largely expected by industry experts. Bloomberg Intelligence ETF analyst James Seyffart shared his views on the delay, indicating that the more significant dates for the decision are expected to be in late May. This prediction by Seyffart points to late May as a critical period for definitive actions regarding the approval or rejection of the Fidelity Ethereum ETF.

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Prospects of SEC Approval for Ethereum ETFs Remain Uncertain

Recent insights from TD Cowen analyst Jaret Seiberg suggest that the U.S. Securities and Exchange Commission (SEC) may not be close to approving exchange-traded funds (ETFs) for alternative cryptocurrencies, including Ethereum.

This cautious stance is rooted in the SEC’s strategy to first assess the impact of the newly approved Bitcoin ETFs before considering similar approvals for other cryptocurrencies. Seiberg indicated that the wait for Ethereum and other crypto token ETFs could potentially extend beyond the 2024 U.S. presidential elections in November.

However, the industry is abuzz with speculation following the SEC’s recent approval of 11 spot Bitcoin ETFs, which has raised hopes for a potential green light for a spot Ethereum ETF. Amidst this anticipation, Fidelity, along with other

major players like BlackRock and Grayscale, is actively seeking approval for a spot Ethereum ETF. Their entry into this space marks a critical phase in defining the regulatory framework for Ethereum-based investment products, with significant implications for the broader cryptocurrency market.

Ethereum ETF Approval: A Turning Point in Crypto Investment

Last week, Ethereum’s co-founder Joseph Lubin underscored the importance of the U.S. Securities and Exchange Commission (SEC) approving a spot Ether ETF, pointing out the inefficiencies in current financial instruments compared to ETFs.

Lubin differentiates between Bitcoin and Ethereum, describing the latter as a commodity that facilitates transactions and storage on its network, as opposed to Bitcoin’s role primarily as a store of value.

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This perspective is echoed by BlackRock’s CEO, Larry Fink, who recently supported the idea of spot Ethereum ETFs. His endorsement comes in the wake of BlackRock’s successful launch of a spot Bitcoin ETF, where he acknowledged the potential value of an Ethereum ETF.

In light of these developments, investors are keeping a close watch on the evolving regulatory landscape. The potential approval of a spot ETH ETF is seen not just as a significant step for Ethereum but also as a possible precursor for the approval of ETFs for other cryptocurrencies like Solana, XRP, and Cardano.

Experts suggest that such an approval could act as a catalyst, broadening the scope of regulated crypto investment products and potentially transforming the market for digital assets.


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Donald Haymatter

Donald Haymatter is an expert broker with 15+ years of experience. He stays up-to-date with the latest financial news and trends to help clients make informed investment decisions. Donald is known for his analytical approach and personalized investment advice. Outside of work, he enjoys reading and mentoring young professionals.

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