The launch of Fidelity’s highly anticipated Ethereum ETF experienced a delay as the United States Securities and Exchange Commission (SEC) granted an extension, pushing the final decision date to March 5, 2024. According to the official statement, the SEC justified this postponement by deeming it necessary to have an additional period to assess the ETF proposal and related matters presented by Fidelity.
This delay did not catch many experts in the financial field by surprise, including James Seyffart from Bloomberg, who predicts a possible approval of the Ethereum ETFs in May. This projection aligns with the SEC’s deadline for making final decisions on various ETF-related applications. Seyffart emphasizes that this optimism is based on the analysis of previous timelines and market dynamics.
— James Seyffart (@JSeyff) January 18, 2024
The bullish sentiment towards the approval of Ethereum ETFs is also supported by Eric Balchunas, a senior ETF analyst, who considers it unlikely for the SEC to approve Bitcoin ETFs and not ETH ETFs. Balchunas suggests that, given the growing demand and acceptance of cryptocurrency ETFs, the SEC is likely to adopt a consistent stance for both leading cryptocurrencies.
According to TD Cowen, Ethereum Would Have to Wait Until After the U.S. Elections
However, TD Cowen, an investment bank, introduces a dose of uncertainty by suggesting that the wait could extend up to 26 months, with approval possibly coming after the U.S. elections. Cowen argues that the SEC might prioritize gaining experience with Bitcoin ETPs before considering approval for Ethereum ETPs or other cryptocurrencies.
Fidelity Investments, along with BlackRock, is in the race for the Ethereum ETF, having submitted a formal application (19b-4) to the SEC on November 17. The proposal is named the “Fidelity Ethereum Fund,” and Fidelity achieved notable success with its Bitcoin ETF. In the first five days of operation, it generated an impressive trading volume of $2.1 billion and fund inflows totaling $1 billion, placing it among the top issuers alongside BlackRock and Grayscale.
While investors eagerly await the SEC’s final decision on Fidelity’s Ethereum ETF, the financial community expresses confidence in eventual approval, although divergent opinions persist regarding the time this process might take.