ETH ETF facing troubles?

Certainly, there are several factors that contribute to the skepticism surrounding the approval of ETH ETFs. The first of them is limited SEC engagement. Meetings between issuers, custodians, and the commission’s staff have reportedly been one-sided. The regulator is showing less engagement compared to previous interactions on BTC spot ETFs.

Secondly, the SEC Chair Gary Gensler’s stance is been looked at as less favorable toward ETH ETFs. It can be considered the approval of BTC spot ETFs as a concession to the industry.

The last factor is political influence as an effective anti-crypto politician is reportedly opposed to approving ETH ETFs. This includes Senator Elizabeth Warren who is creating headwinds for the regulatory process.

What’s going on with US SEC?

While the commission has not provided comments on ETH ETFs to asset managers. Bloomberg’s senior ETF analyst, Eric Balchunas reportedly sees this as an unfavorable sign. The absence of dialogue between the SEC and asset managers is lowering the odds of approval. A weaker correlation between Ethereum spot and futures ETFs adds to the pessimism.

According to reports, Coinbase, the US’s biggest cryptocurrency exchange, held a meeting with the SEC to discuss Grayscale’s proposed Ether ETF. Grayscale had applied to convert its Grayscale Ethereum Trust into a spot ETH ETF in October.

The exchange in a presentation addressed potential market manipulation concerns. It highlighted comprehensive surveillance-sharing agreements to monitor fraud and manipulation.

The SEC’s approval of 11 spot Bitcoin ETFs in January marked a significant development, but the regulatory path for ETH ETFs appears to face challenges. With the May 23 deadline just over two months away, industry participants remain uncertain about the SEC’s stance and the potential approval of Ethereum spot ETFs in the near term.