In the dynamically changing world of cryptocurrencies, key regulatory decisions often shed light on the future of the market. Recent actions of the Securities and Exchange Commission (SEC) in the United States, concerning the Ethereum ETF managed by Fidelity, represent a significant turning point. Postponing the decision to March 5 may have broader consequences for the entire cryptocurrency ecosystem.
The cryptocurrency market is once again in the spotlight, this time due to the decision of the U.S. Securities and Exchange Commission (SEC) to postpone the decision on the Ethereum ETF managed by Fidelity to March 5. This event is not isolated, as it fits into a broader context of applications for other financial products based on Bitcoin, also awaiting SEC approval.
In November last year, Fidelity filed an application for the approval of the Ethereum ETF. In its proposal, the company referred to a court ruling from the previous year, in which judges pointed out the SEC’s lack of consistent reasoning for rejecting cryptocurrency-based ETFs while accepting futures-based products.
The initial deadline for the SEC to approve, reject, or begin proceedings regarding Fidelity’s application was January 20. However, the commission decided to use the option to extend the deadline by 45 days.
Bloomberg’s ETF analyst James Seyffart expressed belief that the delay was predictable, pointing to significant dates at the end of May. In particular, he noted the final deadline of May 23 for the approval or rejection of VanEck’s Ether ETF.
Last week, the SEC approved 11 Bitcoin ETFs to begin trading. This decision, enthusiastically received in the market, raised optimism about the possibility of a quick approval of the Ethereum ETF. Stuart Barton, co-founder of Volatility Shares, expressed belief that the approval of the Ethereum ETF is very likely, pointing to the earlier authorization of futures-based ETFs.
In the context of waiting for the SEC’s decision regarding the Fidelity Ethereum ETF, the company Direxion filed an application for five Bitcoin ETFs, following earlier filings by ProShares and REX Shares. Direxion’s plans include funds with 1x, 1.5x, and 2x long leverage on Bitcoin, as well as one fund with short leverage.
The shift in the SEC’s decision timeline may seem like just a minor shift in the calendar. However, it has much deeper significance for the cryptocurrency market, potentially opening the doors to new investment opportunities and more broadly – for the acceptance of cryptocurrencies as an important component of the global financial system.
