Lawyer Predicts Timeline for Approval of Spot Ethereum ETF

If the U.S. Securities and Exchange Commission (SEC) does not approve a spot Ethereum ETF by May 2024, it is likely to do so by mid-2025, according to lawyer Scott Johnsson.

SEC simultaneously issued initial comment letters on issuers’ BTC spot ETF reg statements on 9/29/2023. We saw amended S-1s show up about 2 weeks later… so about 90 days ahead of the Jan 10 deadline. We’re now 90 days out from May 23rd deadline for ETH spot ETFs. pic.twitter.com/BnVWLTIcZz

— Scott Johnsson (@SGJohnsson) February 23, 2024

“On September 29, 2023, the SEC simultaneously published initial comment letters on applications for spot Bitcoin ETFs. Amended S-1 forms appeared about two weeks later, approximately 90 days before the January 10, 2024 deadline. We are now 90 days away from the May 23 deadline for spot Ethereum ETFs,” he wrote.

However, according to the lawyer, there is sufficient reason to believe that the SEC might deviate from its previous schedule and delay the S-1 comment process until after the approval of 19b-4.

Confidence relatively high that if not May 2024, then by mid 2025 it should come.

— Scott Johnsson (@SGJohnsson) February 23, 2024

“Relatively high confidence that if not in May 2024, then by mid-2025 it should happen,” Johnsson added.

Bloomberg exchange analyst James Seyffart stated that the SEC does not need as much time to process Ethereum ETF applications as it did with the first cryptocurrency, since a significant portion of the documents can be based on the Bitcoin ETF.

I agree. It should be quicker this time around, which may explain lack of engagement right now. And it assumes the SEC will even comment ahead of 19b-4 approval (which is not a guarantee).

— Scott Johnsson (@SGJohnsson) February 23, 2024

“I agree. The process should be quicker this time, which explains the lack of engagement right now,” Johnsson replied.

Keyrock CEO Kevin de Patoul, in an interview with Cointelegraph, assessed the chances of a spot Ethereum ETF being approved in the U.S. as above 50%.

In his view, one of the main obstacles is SEC Chairman Gary Gensler, who might classify the second-largest cryptocurrency by market capitalization as a security.

The expert noted that Ethereum’s transition to the Proof-of-Stake consensus algorithm in September 2022 makes the asset more akin to a security from the regulator’s perspective.

In February, Seyffart wagered 4 ETH (about $12,000 at the time of writing) that the SEC would not approve spot ETH ETFs in March. However, he refrained from betting against this event by the end of 2024.

Previously, FOX Business predicted the registration of an Ethereum ETF by May. Seyffart estimated this probability at 60%, while his colleague Eric Balchunas was slightly more optimistic at 70%. Morgan Creek Capital CEO Mark Yusko was more pessimistic, suggesting a 50/50 chance.

Analysts from JPMorgan and TD Cowen also expressed doubts about the imminent approval of these products.

Experts from Standard Chartered suggested that the SEC might register spot Ethereum funds by May 23, with the cryptocurrency’s price reaching $4,000 by then.