By Michael Scott
The move by the US Securities and Exchange Commission (SEC) to postpone approval decisions on spot Ether exchange-traded funds leaves analysts pessimistic. Hopes of the approval dwindled following the Gary Gensler-led Commission pushing back on the bid by Hashdex and ARK 21Shares for the spot Ether ETF.
The SEC conveyed the delay decision on Tuesday, March 19, days before the expiry of the third deadline, with both Ether ETF bids to wait till the late May decision. The Commission has May 24 to issue a final verdict for the ARK 21Shares and May 30 for the Hashdex’s application.
The analysts have expressed pessimism about the chances of the Commission approving any of the eight applications for the Ether ETFs. The analysts turned sour when the Commission received bids from BlackRock, VanEck, Grayscale, Franklin Templeton, Fidelity, Invesco Galaxy, and Hashdex.
Analysts Pessimistic on ETH ETF Approval
Bloomberg lead ETF analyst James Seyffart revealed in a Tuesday, March 19 post on X that he is concerned by the missing engagement between SEC and hopeful issuers of spot Ether ETF. Seyffart admitted that the cautious, optimistic attitude regarding ETH ETFs has changed recently. He regretted that he now believes the SEC will ultimately deny the applications on May 23.
Fellow Bloomberg ETF analyst Eric Balchunas had in a March 12 post on X indicated lower approval odds for the Ether ETF. He rated the approval odds as 35%, down from 50%.
Balchunas acknowledged that signs that made the community bullish for the spot Bitcoin ETFs are non-existent. He confessed to feeling the reverse of experiences during the spot Bitcoin ETF race that ended in a January 10 approval.
Public sentiment is declining, with Polymarket odds reporting they dwindled from 77% in January to 32%. Polymarket involves a decentralized betting platform where $2.2 million is bet on the Ether ETFs’ outcome.
Grayscale Adds Staking to Ether ETF Application
Asset management firm Grayscale is the latest to integrate staking into its bid for the spot Ether ETF. A recent update acknowledges sending consent solicitation statements to the investors within the Grayscale Ethereum Trust’s four proposals, one being the capacity to stake Ether.
The proposal will permit the Trust to use Ethereum, which is held within the proof-of-stake validation protocol, for the consideration that ultimately benefits the shareholders.
Grayscale submitted that staking Ethereum will facilitate the mitigation of inflationary pressures arising from the proof-of-stake protocol. Also, staking will reduce the maintenance of parity with similar investment products offering users staking.
Grayscale’s proposals await consent from over 50% of the shareholders. The approval would see Grayscale join Fidelity, Franklin Templeton, and Cathie Woods’ ARK 21Shares that recently included Ether staking to the spot ETF applications.
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