In a recent interview with Coinage Media, Hester “Crypto Mom” Peirce, a Commissioner at the United States Securities and Exchange Commission (SEC), expressed confidence that lawsuits would not be necessary to persuade the SEC to approve spot Ether (ETH) exchange-traded fund (ETF) applications. Peirce’s remarks come amidst growing anticipation for the approval of Ether ETFs, with several prominent financial institutions seeking regulatory approval.
Commissioner Peirce firmly stated,
“We shouldn’t need a court to tell us that our approach is ‘arbitrary and capricious’ for us to get it right.”
Her comments referred to the Grayscale court ruling, which preceded the approval of spot Bitcoin ETFs in the United States. She emphasized that the SEC’s approach to approving Ether ETFs would not follow a similar path of legal battles.
While acknowledging the importance of the Grayscale precedent, Peirce also highlighted that each ETF application presents unique facts and circumstances. She stressed that the SEC invests considerable effort in ensuring that any exchange-traded product aligns with its disclosures and operational mechanisms. Peirce stated,
“Having heard from a court that our approach was wrong […] I think that kind of a lesson will certainly stick with us.”
Prominent applicants await approval
Many well-known financial institutions, including BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, and Hashdex, have submitted spot Ether ETF applications to the SEC. With these applications, the crypto industry eagerly anticipates the SEC’s decisions, which could have significant implications for the cryptocurrency market.
Senior Bloomberg ETF analyst Eric Balchunas has estimated a 70% likelihood of spot Ether ETF approval by May. The SEC must decide on various applications by specific deadlines, including VanEck’s by May 23, ARK 21Shares by May 24, Hashdex by May 30, Grayscale by June 18, and Invesco by July 5. Fidelity and BlackRock’s applications await decisions by August 3 and August 7.
Balchunas believes that Ether ETFs have a strong chance of approval, considering the close relationship between Ether and Bitcoin. He stated,
“The Ether spot is tied to the hip of the Bitcoin spot. It’s gonna go wherever it goes. It’s basically like on a 15-foot rope following it.”
Differing views on approval prospects
While optimism abounds regarding the approval of spot Ether ETFs, some industry experts remain cautious. Mark Yusko, CEO of Morgan Creek Capital, predicts less than a 50% chance of approved spot Ether ETFs. He argues that the SEC maintains a generally skeptical stance toward the cryptocurrency industry.
SEC Chair Gary Gensler has also emphasized the need for caution. In a letter dated January 11, Gensler noted that approving a spot Bitcoin ETF should not be seen as a signal for mass approval of other cryptocurrency ETF applications. He asserted,
“The vast majority of crypto assets are investment contracts and thus subject to the federal securities laws.”