As the crypto industry eagerly awaits the SEC green light for Ethereum Spot ETFs, Bloomberg star analyst Eric Balchunas is sounding the alarm. The silence of the American regulator towards potential fund issuers does not bode well according to him.
A radio silence with multiple interpretations
The Securities and Exchange Commission (SEC) approval process for Ethereum ETFs appears to be at a standstill. At least that is what the worrying radio silence of the American stock market policeman suggests a few weeks before the final deadline.
An observation shared by Eric Balchunas, renowned ETF analyst at Bloomberg, for whom the chances of a green light are currently reduced to only 35%, compared to 50% previously.
According to Mr. Balchunas, this lack of communication 73 days before the final verdict is a bad sign. “ The SEC must comment and issuers must work to correct them. It’s quite a long process“, underlines-he.
This radio silence contrasts with the usual process, where the SEC actively communicates with issuers to refine their files. “ The SEC must comment and issuers must work to correct them. They may have to resubmit their application and may even want to set up a few meetings – it’s a fairly lengthy process.“, explains the analyst in an interview with Cointelegraph.
For Mr. Balchunas, the race for Ethereum ETFs is similar to the “opposite” of the scenario experienced for Bitcoin. “ It’s just different. Whether it was our sources, actual public documentation, or our instincts, everything fed into each other in a positive way for Bitcoin. We have the impression that it is the opposite for the Ether,” he laments.
Ethereum, a security in the eyes of the president of the SEC?
Beyond the silence of the SEC, the position of its president Gary Gensler on Ether could also weigh in the balance. According to Eric Balchunas, Mr. Gensler still considers Ether as a security, unlike Bitcoin which he equates to a commodity.
This vision could dampen the regulator’s appetite for approving an Ethereum ETF, especially after the mixed political feedback following the green light given to Bitcoin ETFs and the legal defeat against Grayscale in August 2023. Gensler could balk to put the table back on.
“ Ultimately, Mr. Gensler believes that Ether is a security. He wouldn’t want to approve it if he didn’t think it was a commodity like bitcoin“, analyzes Mr. Balchunas. This position of principle, coupled with a desire not to expose itself again, could explain the current reluctance of the SEC.
In short, the radio silence of the SEC on Ethereum spot ETFs worries observers, like Eric Balchunas who revised downwards the chances of approval. Between lack of communication, Gary Gensler’s position and regulatory inconsistencies, the obstacles seem to be multiplying. Still, for many, the question is not if an Ethereum ETF will see the light of day, but when. The presidential elections of November 2024 could therefore constitute a turning point.
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