US SEC Delays Decision on Invesco and Galaxy Digital’s Joint Ethereum ETF

The U.S. Securities and Exchange Commission (SEC) has extended the decision period for Invesco and Galaxy’s spot Ethereum ETF, as expected by analysts.

This extension pertains to a proposed rule change from Cboe BZX that would enable the listing and trading of shares of the fund.

The SEC’s decision follows the publication of the proposed rule change for comment in the Federal Register on Nov. 8, 2023. Subsequently, on Dec. 13, 2023, the agency designated a longer period for approval, extending the time frame during which it could approve, disapprove, or institute proceedings surrounding approval or disapproval.

The latest filing from the SEC indicates that it has chosen to institute proceedings for approval or disapproval. The agency has requested commenters to address concerns related to fraud prevention, market manipulation, and investor protections, issues that were pivotal in the approval of spot Bitcoin ETFs in January.

Exact deadlines were not provided by the SEC. However, it stated that comments should be submitted within 21 days of publication in the Federal Register, with rebuttal comments due within 35 days of publication in the same.

SEC just delayed @InvescoUS & @galaxyhq's #Ethereum ETF. 100% expected and more delays will continue to happen in coming months.

The only date that matters for spot #ethereum ETFs at this time is May 23rd. Which is @vaneck_us's final deadline date pic.twitter.com/gkVZL2QuPK

— James Seyffart (@JSeyff) February 6, 2024

May Remains Key Time Frame for Spot Ethereum ETF Approval

While the extension affects the timeline for Invesco and Galaxy’s ETF proposal, it does not impact the broader approval timelines for Ethereum ETFs. Bloomberg ETF analyst James Seyffart noted the delay and emphasized May 23rd as a significant date, which marks VanEck’s final deadline for its proposal.

The SEC is anticipated to decide on multiple similar proposals simultaneously, potentially including those with deadlines beyond VanEck’s proposal.

Over the past weeks, the SEC has postponed various other spot Ethereum ETFs, including applications from Fidelity on Jan. 18, BlackRock on Jan. 24, and Grayscale on Jan. 25. These delays, however, do not alter the broader decision deadline set for May.

The likelihood of the SEC approving a spot Ethereum ETF remains uncertain. Polymarket prediction market currently suggests a 43% chance of approval by May. Seyffart estimates a 60% chance, while a JP Morgan member suggests 50%.