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After months of deliberation, the Securities and Exchange Commission (SEC) is turning to the public for comments on Ethereum ETF applications.
The public has been given 21 days to give their comments on proposals from the Fidelity Ethereum Fund, Grayscale Ethereum Trust, and Bitwise Ethereum Trust.
Asking for public opinion is not an uncommon procedure for the SEC ahead of deciding on ETF applications. The process allows the regulator to assess risks and benefits of the proposals for investors.
Speaking specifically about Bitwise's application, the SEC said, “The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons.”
Bitwise recently filed for a Spot Ethereum ETF with the SEC but expressed hope for the regulator to delay their decision until the end of the year.
Blockhead
"I think the ether ETFs will be more successful if they launch in 12 months than if they launch in May," Matt Hougan, CIO of Bitwise said.
"They'll be successful if they launch in May; they'll attract hundreds of millions of dollars or a billion dollars. But I think if they launch in December, they'll be even more successful."
The odds of the SEC approving Ethereum ETFs in May are dwindling. Bloomberg Intelligence ETF analyst Eric Balchunas slashed his probability rate of approval from 70% to 35%.
James Butterfill, head of research at CoinShares, believes the ETH ETF window is looking more like Q3 rather than May.
Another Bloomberg ETF analyst, James Seyffart, suggested that said the radio silence from the SEC isn't encouraging. The regulators "need to start having convos with the issuers ASAP and they don’t seem to be doing that based on anything we’ve seen thus far," he said.
Blockhead
SEC Chair, Gary Gensler, has classified Bitcoin as a commodity but has yet to make his mind up about Ethereum. In fact, his decision to approve Ethereum futures ETFs in October, which some believed was enough to push through ETH ETFs, muddies the waters even more.
"If he believes eth is a security, then why approve eth futures ETFs? That’s implicitly classifying eth as a non-security commodity," questioned ETF Institute co-founder Nate Geraci.
Additionally, the SEC has issued a series of subpoenas to companies with a focus on their interactions with the Ethereum Foundation.
