Industry sources cited by Reuters have revealed that the US Securities and Exchange Commission (SEC) is likely to reject applications for Ethereum-based spot exchange-traded funds (ETFs) next month. This highly anticipated decision from the SEC could potentially have a significant negative impact on Ethereum (ETH), the leading altcoin.
A consortium consisting of BlackRock, VanEck, ARK Investment Management, and seven other organizations had submitted applications to the SEC to offer an Ethereum-based spot ETF in the US. The final decision on these applications is expected to be announced on May 23 and 24. However, sources close to the matter have indicated that the SEC, following mandatory discussions with the involved parties in recent weeks, is planning to deny the requests for Ethereum-based spot ETFs.
The crypto community is eagerly awaiting the SEC’s decision on Ethereum-based spot ETFs. However, the possibility of a denial from the SEC is seen as a setback for applicants and the overall cryptocurrency market, highlighting the challenges associated with introducing new crypto-based financial investment tools due to regulatory hurdles.
The expected denial of applications for Ethereum spot ETFs is a result of increased scrutiny surrounding the regulatory framework for financial products linked to Ethereum. The SEC’s classification of Ethereum as a security remains a major obstacle for the altcoin in the cryptocurrency market.
On the other hand, if the SEC officially denies the applications for spot ETFs, it could have a significant negative impact on Ethereum. While experts have been anticipating more rejections than approvals for some time, an official denial from the US regulator could keep prices of Ethereum under pressure and lead to a sharp decline.
Prior to the news of the SEC’s likely denial, the price of ETH had already dropped by approximately 3%. Following Reuters’ report, the selling pressure on ETH intensified. At the time of writing, the price of the altcoin has been trading at $3,084 over the past 24 hours, reflecting a 5.63% decrease. Experts argue that the $3,000 level is a critical threshold for ETH, and in order to prevent further decline, the price needs to remain above this level.
Disclaimer: The information provided in this article should not be considered as investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
