The United States Securities and Exchange Commission (SEC) has recently delayed its decision on the proposed spot for Ether exchange-traded funds (ETFs) by Hashdex and ARK 21Shares. The announcement, made on Tuesday, March 19, comes just before the “third deadline” set by the agency for these applications. Both Ether ETF proposals will now be decided upon in late May, with May 24 set for ARK 21Shares and May 30 for Hashdex.
Analysts have become more pessimistic about the chances of approval for the eight proposed Ether ETFs, including those from BlackRock, Grayscale, Fidelity, and others. Bloomberg ETF analyst James Seyffart has expressed concerns about the lack of communication between the SEC and the issuers, causing him to change his outlook from cautiously optimistic to doubtful. Eric Balchunas, another Bloomberg ETF analyst, has also lowered the approval odds for Ether ETFs from 50% to 35%.
Public sentiment regarding the approval of Ether ETFs has also decreased, as seen by the declining odds on platforms like Polymarket. The probability of approval by the end of May has dropped from 77% in January to just 32%. Polymarket, a decentralized betting platform, has witnessed approximately $2.2 million wagered on the outcome of the Ether ETFs, indicating significant interest and concern among investors.
Grayscale, a prominent asset manager, is considering adding staking to its spot Ether ETF application. In a “consent solicitation statement” sent to investors of its Grayscale Ethereum Trust, the firm has outlined proposals to enhance its capabilities. One of these proposals involves allowing the trust to stake Ether held within it, thereby participating in proof-of-stake validation protocols in exchange for consideration. Grayscale has highlighted that staking Ether would help mitigate inflationary pressures from Ethereum’s proof-of-stake protocol and maintain parity with similar investment products offering staking options.
The proposals put forward by Grayscale will be subject to a vote, requiring the consent of over 50% of shares for approval. If approved, Grayscale would join other issuers like ARK 21Shares, Franklin Templeton, and Fidelity, who have recently integrated Ether staking into their spot ETF applications.
