US SEC Postpones Resolution of Fidelity Spot Ethereum ETF to March

After the recent approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC), it received multiple applications for a comparable product for Ethereum. However, on Thursday, January 18, the SEC postponed a decision on the spot Ethereum ETF proposed by Fidelity.

Ethereum ETF Resolution Delayed to March 2024

The U.S. Securities and Exchange Commission (SEC) has announced an extension of the review period for a proposed rule change by Cboe BZX Exchange, Inc. The proposed change involves the listing and trading of shares of the Fidelity Ethereum Fund under BZX Rule 14.11(e)(4), which pertains to Commodity-Based Trust Shares.

Cboe filed the proposed rule change with the SEC on November 17, 2023, under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4. The proposal was published for public comment in the Federal Register on December 6, 2023.

According to Section 19(b)(2) of the Act, the SEC is required to take action on a proposed rule change within 45 days of its publication for public comment. However, the Commission has the authority to extend this period up to 90 days if deemed necessary. The original deadline for the proposed rule change related to the Fidelity Ethereum Fund was January 20, 2024.

The SEC has decided to designate a longer period to thoroughly assess the proposed rule change and address any associated concerns. As a result, the Commission, in accordance with Section 19(b)(2) of the Act, has set March 5, 2024, as the new deadline by which it will either approve or disapprove the proposed rule change or initiate proceedings to determine its disapproval. This extension allows the SEC adequate time for a comprehensive evaluation of the proposed listing and trading of Fidelity Ethereum Fund shares.

ETH Price Down By 3%

Amid the broader market sell-off, the Ethereum price has tanked by 3% as of press time. At press time, Ethereum (ETH) is trading at $2,459 with a market cap of $295 billion. The ETH price still remains much above its ascending triangle pattern on the technical charts thus, keeping the gates open for a rally to $3,400 and more.

The prospects for approving an Ethereum ETF face uncertainty in contrast to the recent launch of a Bitcoin ETF. Unlike the relatively smooth journey of the BTC ETF, which involved debates and lawsuits but ultimately received acknowledgment from SEC Chair Gary Gensler as a non-security commodity akin to gold and silver, Ethereum’s classification remains ambiguous. Gensler exercises caution in defining Ethereum, creating a cloudy landscape for the potential approval of its own ETF.

Moreover, banking giant JPMorgan has also expressed skepticism over the approval of spot Ethereum ETF by May 2024.