The SEC met with Ether ETF hopefuls, but discussions reportedly lacked meaningful feedback.<\/p>\n
The U.S. Securities and Exchange Commission has finally initiated meetings with spot Ether ETF applicants, however, analysts remain doubtful that the funds could soon receive regulatory approval.<\/p>\n
On April 8, Nate Geraci, co-founder of The ETF Institute,\u00a0tweeted<\/a>\u00a0that the SEC had held meetings with several spot Ether exchange-traded fund applicants regarding their filings. However, a report from Barron\u2019s states the meetings were predominantly one-sided, with the agency failing to give the firms any \u201ccritical feedback needed to finalize their products.\u201d<\/p>\n \u201cWall Street hopes for a quick follow-up to Bitcoin ETFs are fading fast,\u201d Barron\u2019s\u00a0said<\/a>, noting that the SEC has until May 23 to deliver a verdict on the pending Ether ETF applications. \u201cAt this point in the Bitcoin ETF process, the issuers were already engaged in a robust back-and-forth with agency staff.\u201d<\/p>\n The news comes as analysts and even the executives of Ether ETF applications have turned bearish on the funds\u2019 chance of approval, following bullish expectations amid the debut of\u00a0spot Bitcoin ETFs<\/a>\u00a0in January.<\/p>\n Eric Balchunas<\/a>, a senior ETF analyst at Bloomberg described the meetings as \u201cinteresting,\u201d but said his expectations of approvals next month remain low at\u00a025%<\/a>. \u201cAs we’ve said, need SEC to give comments on the filing documents\u2026 and that still ain’t happening, even in person they offering nothing,\u201d Balchunas\u00a0tweeted<\/a>.<\/p>\n In January, Balchunas estimated there was a 70% chance the Ether ETFs would be greenlit in May.<\/p>\n Jan Van Eck, the CEO of VanEck, a spot Bitcoin ETF issuer awaiting a verdict on its application for an Ether ETF, is also pessimistic regarding the funds\u2019 prospects due to the lack of communication from the SEC just six weeks out from the agency\u2019s deadline.<\/p>\n Van Eck\u00a0told<\/a>\u00a0CNBC that he expects his firm\u2019s Ether ETF applications will \u201cprobably be rejected\u201d in an interview at the Paris Blockchain Week. \u201cThe way the legal process goes is the regulators will give you comments on your application, and that happened for weeks and weeks before the bitcoin ETFs \u2014 and right now, pins are dropping as far as Ethereum is concerned,\u201d he said.<\/p>\n In January, Pranav Kanade, a portfolio manager at VanEck, pegged the likelihood of the funds receiving approval at\u00a050%<\/a>.<\/p>\n Jean-Marie Mognetti, the CEO of CoinShares, also told CNBC that it is unlikely an Ether ETF will be approved \u201cthis side of the year, ” emphasizing uncertainty surrounding the SEC\u2019s view on Proof of Stake assets. While CoinShares, a Bitcoin ETF issuer, has not applied to an Ether fund, Mogentti said his firm is \u201cobserving the Ethereum decision very, very closely.\u201d<\/p>\n However, Craig Salm, the chief legal officer of Grayscale, recently argued that onlookers should not be surprised there is scant communication from the SEC on spot Ether ETF applications. Salm argued that the SEC\u2019s feedback to applicants in the run-up to the initial cohort of spot Bitcoin ETFs going live also applies to the prospective Ether funds.<\/p>\n \u201cAll of these issues were figured out and are identical when comparing spot Bitcoin to Ethereum ETFs,\u201d Salm\u00a0tweeted<\/a>. \u201cThe only difference is rather than the ETF holding bitcoin, it holds Ether\u2026 I don\u2019t think perceived lack of engagement from regulators should be indicative of one outcome or another.\u201d<\/p>\n On April 8, Defiance ETFs also\u00a0filed<\/a>\u00a0for a 2x leveraged futures ETF with the SEC.<\/p>\n The news comes amid bearish momentum for spot Bitcoin ETFs, with the funds collectively suffering their third heaviest daily outflows on April 8 with\u00a0$223.8 million<\/a>\u00a0amid retracement in the digital asset markets, according to SoSoValue. However, outflows slowed sharply the following day, with just $19.5 million exiting the funds.<\/p>\n