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Ethereum ETF for Galaxy Digital Delayed: All Eyes on May 23 and Van Eck’s Deadline

Last Updated February 7, 2024 10:02 AM
Teuta Franjkovic
Last Updated February 7, 2024 10:02 AM

Key Takeaways

  • The SEC has delayed its Invesco-Galaxy spot Ether ETF decision.
  • May 23rd is a key date for Ethereum ETF approvals.
  • Investor optimism remains despite the delay.

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on a proposed spot Ether (ETH) exchange-traded fund (ETF) by Invesco and Galaxy Digital, according to recent filings .

This ETF aims to offer professional investors a direct avenue to invest in spot Ether, contrasting with the current situation where Ether futures on the CME serve as one of the few regulated paths for U.S. investors and funds to speculate on the Ethereum network‘s expansion.

Postponed Verdict on Invesco and Galaxy Digital’s Spot Ether ETF

A recent document  reveals that the US Securities and Exchange Commission (SEC) has solicited public input on various aspects of spot Ethereum ETFs, particularly relating to the application submitted by Invesco Galaxy. Concurrently, the SEC has extended the timeline for this application’s decision by an additional 35 days to allow ample opportunity for the evaluation of public responses:

“The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal.”

James Seyffart, an analyst at Bloomberg Intelligence, explained that the delay in the decision by the SEC was entirely anticipated and that further postponements are expected in the upcoming months. He emphasized that the critical date for spot Ethereum ETFs is May 23, marking the final deadline for the application by VanEck.

Seyffart further noted that the SEC’s approach to managing ETF applications in traditional finance, characterized by postponing decisions until the final deadline, is a standard practice.

He stated :

“I would say this is the norm. Fairly standard operating procedure.”

SEC Seeks Public Insight on Ethereum Markets Amid Application Delays

The regulatory body has previously called upon the public  to share insights regarding the relationship between the Ethereum spot market and the CME Ethereum futures market. This inquiry aims to assess the accuracy of the applicant’s comparison between a CME Ether Futures product and a proposed spot Ethereum ETF.

In response to these developments, the Ethereum Fear and Greed Index , a tool measuring daily market sentiment for specific assets, witnessed a significant drop of nearly 15% within 24 hours following the announcement.

Ether Fear and greed Index
Credit: CFGI.io

Having previously stood at a ‘greed’ level of 66%, the investor sentiment towards Ethereum has adjusted to a more balanced stance, currently at 54%.

SEC Delays Boosting Price Expectations

In January, the SEC postponed its decision on key applications related to Ethereum, including Grayscale Investments’ bid to transform its Ethereum trust product (ETHE) into an exchange-traded fund (ETF), as well as BlackRock’s application for an Ether ETF.

This move has led financial behemoths to predict a potential surge in Ether’s value, with expectations of up to a 70% increase in the coming months, especially as ETF approvals are anticipated in May.

“Given the expected approval date on May 23, we foresee ETH prices either mirroring or surpassing the performance of bitcoin (BTC) during the analogous timeframe,” stated Standard Chartered Bank in a January note, highlighting the optimistic outlook for Ethereum ahead of the pivotal decision date.

Ethereum leads major cryptocurrencies with a 1.5% increase  in the last 24 hours.

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