VanEck and CoinShares question the possibility of approving ETH ETFs in May

In March, the SEC postponed the product’s decision date a second time; in total, the commission is entitled to three postponements

10.04.2024 - 09:10

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What’s new? Some issuers of US spot bitcoin exchange-traded funds (ETFs) have expressed doubt that a similar Ethereum-based product will be allowed into the local market in the near term. Thus, VanEck CEO Jan van Eck believes that his investment company’s application will be rejected by the Securities and Exchange Commission (SEC) in May.

Material by CNBC

What else is known? Jean-Marie Mognetti, the CEO of investment company CoinShares, said he does not expect ETH ETFs to be approved this year. He said the difficulty is that ETH runs on a blockchain with a Proof of Stake (PoS) consensus algorithm. SEC chair Gary Gensler has previously said that all PoS tokens could be recognized as securities and, as a result, no commodity funds could be created based on them.

However, there is no comprehensive crypto regulation or classification mechanism for cryptocurrencies in the United States so far to categorize them as commodities or securities. Also, the SEC has yet to issue a final ruling on spot ETH ETFs. In March, it repeatedly postponed the deadline for reviewing applications for Ethereum funds, now it has been moved to the end of May. The regulator is entitled to three postponements before making a final decision.

JPMorgan said earlier that the decline in market share of Lido, the largest liquid ETH staking protocol, raises the possibility that ETH will not be classified as a security. Lido’s share fell from 33% to 25% in a year, easing concerns about concentration on the network.

Two months after the launch of spot bitcoin funds, the asset’s exchange rate hit an all-time high above $73 500. Since the start of trading on January 11, the cumulative inflows into ten such funds totaled $12,37 billion.

Many experts note that this instrument opened institutional capital access to the first cryptocurrency, stimulating the development of the entire industry. Brad Garlinghouse, the head of the company developing the Ripple payment protocol, expects the crypto market capitalization to more than double to $5+ trillion by the end of the year.

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