Why U.S Election Will Decide Ethereum ETF Future

According to the social media platform Wu Blockchain Post, the Security and Exchange Commission will likely deny applications for Ethereum spot exchange-traded funds (ETF) on March 25. 

The SEC investigation on the Ethereum foundation has further complicated the situation. Bloomberg Intelligence ETF analyst Eric Balchunas predicts that Ethereum ETFs may be approved at the end of 2025.

Balchunas said if the SEC rejects ETF applications, they have two options for BlackRock, Fidelity, or Ark Invest. They can either sue the SEC, as Grayscale did for Bitcoin ETFs, or reapply later.

On the other hand, the lack of communication with potential issuers and Ethereum’s uncertain regulatory status have made analysts doubtful about the approval. Also, there is no chance of approval of the ETF application. The SEC will reject the ETF application on May 25. 

U.S Elections Impact On Ethereum ETF

The outcome of the U.S. election will significantly influence the SEC’s stance on crypto. If former President Donald Trump wins, the SEC leadership might change, potentially favoring crypto.

A new chairperson might be more crypto-friendly than Gary Gensler, the current chair. In this situation, Issuers could either reapply under new leadership or sue the SEC, prolonging the process.

Grayscale’s lawsuit against the SEC in 2022 resulted in the approval of Bitcoin ETFs. However, Grayscale will likely pursue a similar strategy for Ethereum ETFs. Balchunas said that lawsuits are costly and may not be the preferred option for other issuers.

Balchunas also said that if Trump wins and appoints a new SEC chair, the approval process could be quicker. Assuming a new chair is appointed in April or May, the deadline for approval or rejection could be around December 2025.

Alternatively, issuers may file immediately after the election to expedite the process. If Joe Biden wins, there might be a cooling-off period before issuers reapply.

Related Reading | SEC Blocks Coinbase Appeal Over Post-Sale Obligations

Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.

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