FameEX Hot Topics | Analyst Expects Ethereum ETFs to Face Delays, Potentially Postponing SEC Approval Until 2025

Eric Balchunas, a seasoned Bloomberg ETF analyst, recently shared his skepticism regarding the likelihood of the U.S. Securities and Exchange Commission (SEC) approving spot Ethereum ETFs in the near future. In a detailed interview, he outlined multiple obstacles that could hinder the approval process, despite the SEC having recently greenlit several spot Bitcoin ETFs.

Balchunas highlighted the distinct situation surrounding Ethereum ETFs compared to Bitcoin. He noted that the SEC's move to approve Bitcoin ETFs followed substantial legal pressure from Grayscale in 2022, emphasizing that Grayscale's aggressive litigation stance was somewhat unique because of its relatively limited engagement in the broader ETF market. This is unlike other firms that may be more cautious in challenging the SEC, considering their wider business activities and the potential repercussions of such confrontations.

Adding to the complexity, Balchunas pointed out the ongoing regulatory ambiguities surrounding Ethereum. A key issue is the SEC’s current investigation into whether Ethereum should be classified as a security—a question brought into sharper focus by a recent court document. Furthermore, SEC Chair Gary Gensler has remained non-committal on Ethereum's status, despite receiving queries from 48 lawmakers, thereby perpetuating a climate of uncertainty.

The analyst also delved into the potential ramifications of the upcoming U.S. presidential election on cryptocurrency regulations. He speculated that a win for former President Donald Trump could instigate a leadership overhaul at the SEC, potentially paving the way for a more cryptocurrency-friendly chair. Such a change, according to Balchunas, could significantly boost the chances for Ethereum ETFs.

However, he cautioned that even if the election results were favorable to the crypto industry, any new applications for Ethereum ETFs would still undergo a protracted review process. Balchunas estimated that, assuming a new SEC chair were to be appointed in the spring following the election and that filings were expedited, the SEC’s final decision might not be rendered until around December 2025. He also remarked that while Trump has courted the crypto community’s favor, his previous SEC chair, Jay Clayton, was known for not approving a Bitcoin ETF, indicating that a Trump administration might not automatically lead to a lenient SEC stance.

Balchunas’ commentary underscores the intricate mix of regulatory, legal, and political dynamics that influence the trajectory of cryptocurrency ETFs in the U.S. Although the approval of Bitcoin ETFs represents a significant advancement, Ethereum and other cryptocurrencies continue to face daunting challenges in achieving similar regulatory acceptance under the current U.S. framework.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.