The United States Securities and Exchange Commission (SEC) has delayed its ruling on the Invesco Galaxy ether exchange-traded fund (ETF), and has now been pushed to potentially July 2024 after opening the proposal to public comments.
Invesco and Galaxy Spot Ethereum ETF Decision Delayed by SEC
The SEC has once again postponed its verdict on a proposed spot ether ETF. The delay affects the application by investment giants Invesco and Galaxy Digital, which had sought to launch the Invesco Galaxy Ethereum ETF on the Cboe BZX Exchange.
In a notice dated Feb. 6, the SEC announced its intention to open the proposal to public commentary, extending the decision-making period by an additional 35 days from its publication in the Federal Register. The SEC can push the final decision up to 240 days from the filing date in October 2023, which means the final potential deadline is July 2024 for the SEC’s ruling.
The application by Invesco and Galaxy Digital comes amid a wave of interest in cryptocurrency ETFs, particularly following the SEC’s landmark approval of spot bitcoin ETFs from several asset managers, including Blackrock and Fidelity, that began trading on Jan. 10.
James Seyffart, a Bloomberg ETF analyst, took to social media platform X to comment on the delay, stating it was “100% expected” and predicting further postponements in the coming months. Seyffart highlighted May 23 as a critical date, marking the deadline for a decision on Vaneck’s spot ether ETF application, which could signal the SEC’s approach to other similar products.
The SEC’s hesitancy to approve a spot ether ETF contrasts with its recent approval of spot bitcoin ETFs, which many saw as a turning point for cryptocurrency investments. The approval of spot bitcoin ETFs was accompanied by significant investor interest, suggesting a strong market appetite for similar products based on ethereum, the second-largest digital asset by market capitalization.
Analysts, including those from British bank Standard Chartered, have expressed optimism that a spot ether ETF could be approved by May, citing the SEC’s silence on whether ETH is considered a security as a positive sign. The bank argued that the lack of a designation of ETH as a security might pave the way for ETF approvals, given the SEC’s history of cracking down on crypto companies for selling unregulated securities.
ETFs offer traditional investors a less complex route to cryptocurrency investment, allowing them to buy shares that track the price of digital assets like ethereum without the need for direct purchase or storage. The anticipation surrounding the approval of an spot ether ETF is seen as the next step towards integrating cryptocurrencies into mainstream financial markets.
The SEC’s pattern of delaying decisions on cryptocurrency ETFs has been consistent, with several applications for spot ether ETFs from leading firms being pushed back this year.
Does this delay change the chance of a spot ether ETF being approved this year? Share your thoughts and opinions about this subject in the comments section below.