Fidelity's Ethereum Spot ETF Faces SEC Delay; Anticipated Decisions Remain Set for May

On January 18, the U.S. Securities and Exchange Commission (SEC) announced a postponement in its verdict regarding Fidelity’s proposed Ethereum ETF. This decision revolves around a proposed rule amendment enabling Cboe BZX to list and trade shares linked to Fidelity’s forthcoming fund.

The regulatory body highlighted that the initial filing for the rule change occurred on November 17, 2023, and was open for public commentary after being published in the federal register on December 6, 2023.

Originally, the SEC was obligated to make a determination—whether to approve, reject, or initiate proceedings for disapproval—by January 20, based on those specified dates. However, invoking a provision allowing a 45-day extension, the SEC has pushed the deadline to March 5, 2024.

There is speculation that the SEC is inclined to initiate proceedings regarding Fidelity in March, mirroring its approach to certain other pending funds.

SEC Verdict on Ethereum ETFs Set for May
Bloomberg’s ETF analyst, James Seyffart, commented today, expressing that the delay in Fidelity’s decision was entirely anticipated, emphasizing the significance of late May deadlines. This timing appears linked to the SEC’s obligation to either approve or reject VanEck’s competing spot Ethereum ETF proposal by May 23.

With proceedings already initiated on VanEck’s application, the SEC is bound by this deadline and cannot further postpone its decision. Given the SEC’s tendency to approve similar ETFs concurrently, it is probable that judgments on all outstanding spot Ethereum ETFs will be made in late May, despite differing application deadlines.

It is noteworthy that both Fidelity and VanEck, along with other applicants, secured approval for spot Bitcoin ETFs on January 10. However, the success of Bitcoin ETFs doesn’t guarantee approval for Ethereum ETF proposals.
Public sentiment varies, with one Polymarket prediction market currently indicating a 54% likelihood of spot Ethereum ETF approvals.

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