VanEck CEO Forecasts Rejection of Spot Ethereum ETF, Despite Early Filing
VanEck CEO predicts rejection of Ethereum spot ETFs by the SEC in May, despite being one of the first to apply. The SEC’s guideline to postpone decisions on Ethereum spot ETF applications suggests reluctance. Regardless of the outcome, asset management firms remain committed to pursuing spot Ethereum ETFs.
The fate of spot Ethereum (ETH) exchange-traded funds (ETFs) hangs in the balance as the U.S. Securities and Exchange Commission (SEC) approaches its decision deadline in May. The main voices in the sector anticipate the rejection of these investment products.
Jan van Eck, CEO of asset management firm VanEck, recently expressed skepticism regarding the likelihood of the SEC approving spot Ethereum ETFs.
The VanEck spot bitcoin ETF – which trades under the ticker HODL – is the fifth largest of the 10 recently launched funds (excluding Grayscale). It has received $461.7 million since its launch in mid-January, according to data from Farside Investors.
Commenting on the success of bitcoin ETFs, van Eck described bitcoin as a “maturing asset,” adding that there are still many investors who have not been exposed to this asset.
VanEck Expects Ethereum Spot ETF Rejection, Despite Requesting It First
During an interview with CNBC at Paris Blockchain Week in France, Jan van Eck revealed that they were the first to apply for Ethereum in the United States, along with Cathy Wood, CEO of Ark Invest. He also mentioned that both will likely be rejected in May:
“The way the legal process plays out is that regulators will give you feedback on your application, and that happened for weeks and weeks before Bitcoin ETFs – and right now, the pegs are falling when it comes to Ethereum.”
Van Eck is not the only pessimist. Industry analysts such as Bloomberg Intelligence’s James Seyffart and Eric Balchunas echo this sentiment. Balchunas himself reduced his chances of approval from 70% to just 35%.
Balchunas lowered his formal odds of approval of an Ether ETF for May from 70% to 35%. The analyst reiterated his stance on the pending approvals and echoed Van Eck’s views in a post on X on April 9. The analyst lowered his approval odds to 35% in March.
“As we’ve said, we need the SEC to comment on the filings (the “critical feedback” you mention) and that still isn’t happening; even in person they don’t offer anything. Silence is violence.”
James Seyffart, offered a similar opinion: he said “no comments/interactions is a bad sign.”
“There’s no reason the SEC did absolutely nothing for months when we knew this was coming,” he added.
JPMorgan, however, offers a glimmer of hope. Nikolaos Panigirtzoglou, Managing Director of JPMorgan, suggested that a delay beyond May could lead the SEC into a legal skirmish. This would be reminiscent of previous confrontations with Grayscale. Panigirtzoglou says the SEC may not emerge victorious if litigation occurs.
Ethereum Spot ETFs Continue to Generate Debate
The SEC’s stance on Ethereum remains the subject of debate. BlackRock CEO Larry Fink believes the SEC could give the green light to an Ethereum ETF even though it considers the security of ETH, unlike Bitcoin.
Amid these opinions, Matt Hougan, chief investment officer at Bitwise, notes that the SEC is dragging its feet on approving Ethereum spot ETFs. This tactic was on display when the SEC deferred its decision on BlackRock’s iShares Ethereum Trust in January 2024, followed by postponements for Hashdex and ARK 21Shares in March.
The SEC consistently cites the need for “sufficient time” to review these proposals in its postponement notices. Hence this repetitive pattern suggests a reluctance to approve them.
Despite the uncertainty, asset managers remain determined. Sector heavyweights like BlackRock, Fidelity, VanEck, ARK 21Shares, Hashdex, Grayscale, and Franklin Templeton continue to pursue Ethereum spot ETFs.
By Audy Castaneda