SEC Punts Decision on Spot Ether ETFs from ARK 21Shares and VanEck to December: What’s the Holdup?

The crypto world is once again holding its breath as the U.S. Securities and Exchange Commission (SEC) has decided to extend its review period for spot Ether (ETH) exchange-traded fund (ETF) applications filed by ARK 21Shares and VanEck. Just when we thought we might see some movement on these highly anticipated investment vehicles, the SEC announced on September 26th that it needs more time. Let’s dive into what this delay means and what’s next in the world of crypto ETFs.

Another Delay in the Spot Ether ETF Saga: What Happened?

In separate filings made public on September 27th, the SEC clearly stated its intention to take more time to consider a proposed rule change. This rule change is crucial because it would allow the listing of spot ETH ETFs from both VanEck and ARK 21Shares on the Cboe BZX Exchange. Interestingly, it seems like the SEC isn’t facing public pressure on these particular applications, as there have been no public comments received regarding these proposals. Despite the lack of public feedback, the SEC has pushed back the deadlines for a final decision to:

• December 25th for the VanEck spot ETH ETF application.
• December 26th for the ARK 21Shares spot ETH ETF application.

The official statement from the SEC explains their reasoning quite simply: “The Commission deems it prudent to establish an extended timeframe for the consideration of the proposed rule change and the issues it raises.” In other words, they need more time to think it over.

What Else is Brewing in the ETF World?

This delay comes at an interesting time, coinciding with a flurry of activity in the ETF space. Just around the same time as the SEC’s announcement, Nasdaq Stock Market proposed a rule amendment to the SEC for listing a mixed ETH ETF. This innovative ETF would combine both spot Ether holdings and futures contracts, offering a potentially different way to gain exposure to Ether.

Furthermore, September 27th saw a series of proposed rule changes submitted to various exchanges for a range of crypto-related ETFs, including:

• New York Stock Exchange Arca: For the Grayscale Ethereum Futures Trust.
• Nasdaq Stock Market: For the Hashdex Bitcoin Futures ETF.
• Cboe BZX Exchange: For the Franklin Bitcoin ETF.

It’s clear that while spot crypto ETFs are facing headwinds, the appetite for crypto investment products in general remains strong, with various firms exploring different ETF structures.

Spot Bitcoin ETF Delays Too?

Interestingly, the SEC’s pattern of extending review periods isn’t limited to Ether ETFs. They previously delayed decisions on spot Bitcoin ETF applications from both ARK 21Shares and Global X, doing so well before the actual deadlines were looming. This earlier delay means that the final verdict on ARK 21Shares’ spot Bitcoin ETF is now expected in January. It seems like the SEC is taking a cautious and methodical approach to all spot crypto ETF applications.

Cathie Wood’s Perspective: Level Playing Field for Spot ETFs?

Back in August, Cathie Wood, the well-known founder and CEO of ARK Investment Management, offered an interesting perspective. She speculated that if the SEC were to finally give the green light to spot ETFs, they might approve multiple listings at the same time. This, she suggested, would create a level playing field for all market participants right from the start.

It’s important to remember that Cathie Wood’s comments came *before* Grayscale Investments achieved a significant legal victory against the SEC regarding their spot Bitcoin ETF application. This legal win has put Grayscale’s application back in the SEC’s review queue and has potentially changed the landscape for spot crypto ETF approvals.

The Big Question: Will the SEC Ever Approve a Spot Crypto ETF?

To date, the SEC has maintained a firm stance against spot crypto ETFs in the United States. They have, however, approved crypto-linked futures ETFs and even a leveraged Bitcoin futures ETF, suggesting a degree of comfort with futures-based products.

Looking ahead, the next few weeks are crucial. October is the month of reckoning for several spot crypto ETF applications, including those from major players like:

• BlackRock
• WisdomTree
• Invesco Galaxy
• Valkyrie
• Bitwise
• Fidelity

Will the SEC continue to delay, or will October finally be the month we see a breakthrough for spot crypto ETFs in the US? The crypto community is watching closely, waiting to see if the regulatory tide will finally turn.

Key Takeaways:

• The SEC has delayed decisions on spot Ether ETFs from ARK 21Shares and VanEck until December 2023.
• This delay coincides with proposed rule changes for mixed ETH ETFs and other crypto-related ETFs.
• The SEC has consistently delayed spot crypto ETF decisions, indicating a cautious approach.
• October is a critical month for decisions on numerous other spot crypto ETF applications.
• The future of spot crypto ETFs in the US remains uncertain, but the market is hopeful for eventual approval.

Stay tuned for more updates as we follow the ongoing saga of spot crypto ETF approvals and the SEC’s evolving stance on digital asset investment products!