SEC to Decide on Ethereum ETFs in May Amid Growing Skepticism

Following delays and skepticism about their approval, the SEC will decide on Ethereum ETFs in May. Despite these challenges, Grayscale Investments and BlackRock have updated their applications for spot Ethereum ETFs. Grayscale recently took a significant step by filing an S-3 registration with the SEC on April 23. It aims to transform its current Grayscale Ethereum Trust into a spot ETF.

This follows an earlier filing by NYSE Arca. Grayscale also plans for a smaller version of an Ethereum ETF, similar to its mini Bitcoin ETF, though the SEC has yet to approve these smaller ETFs. BlackRock has also been active, modifying its filing to include a change from in-kind to cash-based handling of ETF shares, which aligns it with other Ethereum ETF proposals and some approved Bitcoin ETFs. Expectations for approval are low, with Bloomberg analyst Eric Balchunas slashing the likelihood of success from 70% to 25%.

Betting market Polymarket reflects even greater pessimism, showing only an 11% chance of approval by the end of May. The SEC has postponed decisions on several Ethereum ETF applications and plans to address them in May. The outlook is not promising, and market watchers suggest tempering expectations for these potentially groundbreaking investment tools.