The wait continues for an Ethereum exchange-traded fund (ETF) in the US. Industry leaders like Tron (TRX) founder Justin Sun are expressing skepticism about the May approval. In a recent post on social media platform
TRON inventor is pessimistic about Ethereum
This pessimism stems from the SEC’s perceived lack of understanding of the intricacies of the cryptocurrency industry. Sun emphasizes the need for “long-term education with regulators” to close this knowledge gap. His comments echo those of many market analysts who gave low rates to May confirmation. Factors contributing to this skepticism include:
- Reducing SEC Participation: Unlike the Bitcoin ETF approval process, the SEC has taken a less active role in reviewing Ethereum ETF applications. This silence is interpreted by many as a lack of excitement for the product.
- Classification Concerns: Recent speculation suggests that the SEC may classify Ethereum as a security; this could significantly impact ETF approval. This concern is further strengthened by Consensys’ ongoing lawsuit against the Commission regarding the classification of ETH.
- Negative Feedback from Meetings: Reports indicate that meetings between ETF issuers and the SEC have not been encouraging, leading to pessimism about the future of filings. Data from Polymarket reflects this negativity; The odds of approval drop to 11% this year.
Despite the negative outlook, some optimism remains. Big players like BlackRock and Grayscale continue to update their filings, undaunted by the SEC’s silence and potential rejection. Despite the recent delay in the SEC’s decision, Franklin Templeton’s spot Ethereum ETF has even appeared on the Depository Trust and Clearing Corporation (DTCC) website.
SEC uncertainty on Ethereum ETF
Grayscale’s Chief Legal Officer Craig Salm remains confident in the benefits of a spot Ethereum ETF, highlighting investor demand and drawing parallels with the successful launch of Bitcoin ETFs. The SEC’s indecision cast a shadow of uncertainty over the industry. Long delays of more than six months in some applications, combined with delays from major players such as BlackRock and Fidelity, have eroded confidence. In addition, the latest extension granted to Franklin Templeton’s application until June 11 further fuels speculation by many that it could be rejected in May.
This pessimism is further strengthened by comments from prominent figures such as VanEck CEO Jan Van Eck, who predicted that his firm’s application would be among the first to be rejected. Similarly, CoinShares CEO Jean-Marie Mognetti does not foresee any approval before the end of the year. Reports also suggest that many applicants are setting themselves up for rejection based on their recent interactions with the SEC.
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