The United States Securities and Exchange Commission (SEC) has decided to postpone its verdict on the introduction of spot Ether exchange-traded funds (ETFs) proposed by Hashdex and ARK 21Shares.
The delay, announced on March 19, occurred shortly before the SEC’s third and final deadline for these applications, setting the stage for a conclusive decision in late May.
The SEC has scheduled May 24 for its final determination on ARK 21Shares’ application and May 30 for Hashdex’s, marking a critical period for the future of Ether ETFs.
This postponement reflects growing skepticism among analysts about the approval prospects for the eight Ether ETF proposals currently on the table from major firms including BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton.
Bloomberg ETF analyst James Seyffart expressed a shift in optimism on March 19, citing a notable decrease in engagement between the SEC and the ETF issuers, leading him to anticipate likely denials of the applications by May 23.
Similarly, analyst Eric Balchunas adjusted the approval probability for Ether ETFs downward to 35%, highlighting a contrast in the SEC’s approach compared to the spot Bitcoin ETF applications, which experienced more open communication.
The public’s confidence in the approval of Ether ETFs by the end of May has also waned, as indicated by Polymarket odds which have fallen to 32% from January’s more hopeful 77%.
Polymarket, a decentralized betting platform, has seen around $2.2 million wagered on the outcome of these ETF decisions.
In a related development, Grayscale is exploring the addition of staking capabilities to its Ether ETF application.
Through a consent solicitation statement to Grayscale Ethereum Trust investors, the firm proposed enabling the trust to engage in proof-of-stake validation protocols, potentially providing consideration for the benefit of shareholders.
This move aims to counteract inflationary pressures from Ethereum’s proof-of-stake protocol and keep pace with competing products offering staking.
The proposals, requiring approval from over 50% of shareholders, could position Grayscale alongside ARK 21Shares, Franklin Templeton, and Fidelity, who have recently incorporated Ether staking into their ETF offerings.
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