SEC Commissioner Hester Peirce, often referred to as “Crypto Mom” for her favorable views on cryptocurrency, believes that a lawsuit isn’t necessary for the SEC to approve spot Ether (ETH) exchange-traded fund (ETF) applications. In a January 24 interview with Coinage Media, Peirce reflected on the Grayscale court ruling that led to the approval of spot Bitcoin ETFs in the U.S., stating, “We shouldn’t need a court to tell us that our approach is ‘arbitrary and capricious’ in order for us to get it right.”
Peirce mentioned that the SEC might use the same “precedent” established by Grayscale’s case for Ether ETFs, though she recognized that each ETF application has its unique facts and circumstances. She emphasized the importance of thorough preparation for exchange-traded products, including accurate disclosures that align with how the product functions.
Eric Balchunas, a senior Bloomberg ETF analyst, estimated a 70% chance of a spot Ether ETF being approved by May. The SEC has several Ether ETF applications to decide on, with deadlines ranging from May 23 for VanEck’s application to August 7 for BlackRock’s application.
Balchunas suggested that Ether ETFs likely have a clear path to approval, especially following the approval of spot Bitcoin ETFs. He remarked, “The Ether spot is tied to the hip of Bitcoin spot for sure. It’s gonna go wherever it goes. It’s basically like on a 15-foot rope following it.”
However, opinions vary within the industry. Mark Yusko, CEO of Morgan Creek Capital, sees less than a 50% chance for an approved spot Ether ETF, citing the SEC’s generally cautious stance towards the crypto industry.
SEC Chair Gary Gensler, in a January 11 letter, clarified that the approval of a spot Bitcoin ETF does not imply a broader willingness to approve other cryptocurrency ETF applications. He reiterated that most crypto assets are investment contracts and fall under federal securities laws, indicating a careful, case-by-case approach to cryptocurrency ETF approvals.
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