Senior ETF Analyst Unimpressed With SEC’s Attitude Towards Ethereum ETFs

• Eric Balchunas is unimpressed with the SEC’s attitude toward the proposed Ethereum ETF.
• According to Balchunas, SEC staff not communicating with the ETF issuers is not a good sign.
• Balchunas observed a weak correlation between the Ethereum spot and future ETF.

Bloomberg’s Senior ETF Analyst, Eric Balchunas, is unimpressed with the attitude of the U.S. Securities and Exchange Commission’s (SEC) staff over the proposed Ethereum ETF. Balchunas expressed his opinion on the issue on X following the release of a memorandum by the SEC’s Division of Trading and Markets after meeting with Coinbase representatives.

According to Balchunas, SEC staff not communicating with the ETF issuers is not a good sign for the proposal’s approval. He highlights it is a departure from the pattern leading to the recent Bitcoin ETF approvals when the SEC staff communicated with the issuers. 

The famous ETF analyst noted a weak correlation between the Ethereum spot and future ETF compared with Bitcoin. Hence, he is less optimistic about the SEC approving a spot Ethereum ETF.

Notably, the memorandum focused on the New York Stock Exchange (NYSE) Arca’s proposed rule change. The entity proposed listing and trading the Grayscale Ethereum Trust shares under a particular NYSE Arca rule. 

Meanwhile, Balchunas did not consider the proposed spot Ethereum ETFs a lost course. He noted that BlackRock’s involvement in the process is a reason to remain optimistic, but not like it was with the Bitcoin ETF. He agreed with an observer who thinks further delays by the SEC could jeopardize the chances of an Ethereum ETF approval in May. 

According to the observer, the chance of an Ethereum ETF approval in May will disappear if the SEC does not dialogue with the asset managers by next month. Reportedly, the current deadline given by the SEC for approving the Ethereum ETF proposals is May 23.