Many analysts estimate a 50% chance of the funds receiving regulatory approval by the end of May.<\/p>\n
The U.S. Securities and Exchange Commission has delayed the deadline for its verdict on the pending spot Ether ETF applications from BlackRock and Fidelity, the asset issuers behind the two largest spot Bitcoin funds.<\/p>\n
The SEC pushed back both\u00a0 BlackRock<\/a>\u2019s and\u00a0 Fidelity<\/a>\u2019s applications in separate March 4 filings, requesting further feedback regarding the risk associated with Ethereum\u2019s Proof of Stake mechanism.<\/p>\n The SEC questioned whether the consensus system makes Ether vulnerable to a \u201cconcentration of control or influence by a few individual entities,\u201d potentially raising \u201cunique concerns about Ether\u2019s susceptibility to fraud and manipulation.\u201d<\/p>\n However, the SEC also notes a high degree of correlation between the spot Ether markets and Chicago Mercantile Exchange\u2019s (CME) Ether futures ETF at 99.93%. CME said that any prospective market manipulators would need to trade its future ETF and increase the likelihood of detection through its surveillance-sharing agreements with the Intermarket Surveillance Group.<\/p>\n <\/p>\n The SEC’s delay initiates an additional 21-day window for public commentary and up to 35 days for follow-up rebuttal. The SEC previously delayed both ETF applications on Jan. 24.<\/p>\n The SEC\u2019s filings come amid increasing speculation that Ether may be the second cryptocurrency traded by a spot exchange-traded fund after the Jan. 10\u00a0 debut<\/a>\u00a0of 10 spot Bitcoin funds.<\/p>\n At the time,\u00a0 Eric Balchunas<\/a>, a senior ETF analyst at Bloomberg, estimated there is a 70% chance the Ether ETF applications will also receive regulatory approval in May. However, Balchunas\u2019s confidence appears to have receded since,\u00a0 describing<\/a>\u00a0the Ether ETF applications as \u201csmall potatoes\u201d and likening them to an \u201copening act coming on after the headliner\u201d in a March 2 tweet.<\/p>\n Representatives from Bitwise Asset Management, Galaxy Asset Management, and Grayscale all agreed that there is a 50% chance of the funds receiving approval during a Feb. 13\u00a0 panel<\/a>, lining up with predictions from\u00a0 JP Morgan<\/a>\u00a0and\u00a0 Bernstein Trading<\/a>.<\/p>\n However, other analysts are skeptical that a spot Ether ETF will soon enter the markets. On March 1, Jake Chervinsky, a crypto-focused lawyer,\u00a0 tweeted<\/a>\u00a0that the recent surge in bullish momentum surrounding BTC and other digital assets could undermine the likelihood that the SEC will greenlight the prospective Ether funds this year.<\/p>\n \u201cThe SEC got a ton of political blowback for approving BTC ETFs, even though the court basically forced it to,\u201d Chervinsky said. \u201cNow, animal spirits are in control of the market, and an ETH ETF would only add to that.\u201d<\/p>\n <\/p>\n Start for free<\/a><\/div>\n <\/p>\n The performance of spot Bitcoin ETFs has surpassed most expectations after trading for two months, with four of the funds already ranking among the top 11 spot commodity\u00a0 exchange-traded funds<\/a>\u00a0by assets under management.<\/p>\n The ETFs were accumulating BTC at a rate exceeding new Bitcoin issuance by more than 1,000% on Feb. 27, and then again on Feb. 28 amid\u00a0 record inflows<\/a>\u00a0of $637 million Despite the funds posting an outflow of $139.5 million on Feb. 29,\u00a0 $562.7 million<\/a>\u00a0entered spot Bitcoin ETFs on March 4 as BTC rallied to new\u00a0 all-time highs<\/a>, according to Sosovalue.<\/p>\n Strong inflows to spot Ether ETFs could have an even greater impact on the supply dynamic of Ethereum, with ETH already trending deflationary due to its\u00a0 burn mechanism<\/a>\u00a0coupled with high transaction fees and competition for block space.<\/p>\nAnalysts debate Ether ETFs\u2019 chances<\/h2>\n
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Bullish market dynamics<\/h2>\n