Senior Bloomberg ETF analyst predicts that the approval of spot ethereum exchange-traded funds (ETFs) in the U.S. is unlikely to happen this year. While the Securities and Exchange Commission (SEC) has approved spot bitcoin ETFs, the same is not expected for Ethereum due to different regulatory considerations. The upcoming U.S. election could further impact this situation, potentially influencing future cryptocurrency regulations by altering SEC leadership.
According to Eric Balchunas, a senior Bloomberg analyst specializing in ETFs, the approval of spot ethereum ETFs by the SEC is uncertain. In an interview with DL News, Balchunas expressed skepticism about the approval happening by the May 23 deadline, citing limited engagement between the SEC and potential issuers. The uncertain regulatory status of ETH and the SEC’s investigation into the Ethereum Foundation add complexity to the situation. The SEC is currently investigating ether as a potential security, but SEC Chair Gary Gensler has not clarified whether ETH is a security despite being asked by 48 lawmakers.
While the SEC has approved 11 spot bitcoin ETFs in January after consistently rejecting previous applications, Balchunas doubts that the same strategy will be successful for ethereum ETFs. He believes that other potential issuers are hesitant to engage in legal battles with the SEC, unlike Grayscale which challenged the agency in 2022. Balchunas stated that “None of these other firms want to piss off the SEC … Nobody else will step up.”
The upcoming U.S. election in November also plays a role in the approval of spot ethereum ETFs. If former President Donald Trump secures a second term, there is a possibility of a leadership change at the SEC, potentially resulting in a more crypto-friendly chair replacing Gary Gensler. This election outcome could significantly influence regulatory decisions concerning cryptocurrencies. Assuming a new chair takes office in April or May, and filings are promptly submitted thereafter, the deadline for approval or rejection could be around December 2025.
Balchunas suggested that if there is a new president, issuers could file again for approval or take legal action, which would extend the process by another year. While Trump has shown some support from crypto enthusiasts, Balchunas cautioned that he is not necessarily pro-crypto and mentioned that his previous SEC chief, Jay Clayton, did not allow the approval of an ETF either. However, he believes that Trump would still be better for crypto and spot ETFs.
The timeline for the approval of spot ethereum ETFs remains uncertain, and it is unclear whether the SEC will classify ETH as a security.
