SEC Chairman Responds Vaguely on Prospects for Ethereum Spot ETF

SEC Chairman Gary Gensler once again affirmed that his agency currently only allows for the creation of spot ETFs for Bitcoin, and not for any other cryptocurrencies.

SEC Chairman Responds Vaguely on Prospects for Ethereum Spot ETF. Photo: Bloomberg

In an interview with CNBC on January 12th (US time), SEC Chairman Gary Gensler shared his thoughts on the recent approval of 11 new Bitcoin spot ETF proposals and the potential for an Ethereum spot ETF.

As reported by Coin68, although he voted to approve the Bitcoin spot ETF, Chairman Gensler maintained in his subsequent official statement that he does not support cryptocurrencies and emphasized that only Bitcoin, which is considered a commodity, is eligible for spot ETFs. Gensler also referenced a federal appeals court ruling in the Grayscale lawsuit as a key factor forcing the SEC to change its stance on Bitcoin spot ETFs.

In his latest interview, Gensler made somewhat dismissive comments about Bitcoin's original purpose as envisioned by its creator Satoshi Nakamoto — to build a decentralized financial system independent of intermediaries. However, with Bitcoin spot ETFs, there is a risk of centralization and dominance by Wall Street giants.

The SEC Chairman mentioned that since his days teaching blockchain at the Massachusetts Institute of Technology, his view on the crypto industry has acknowledged significant advancements, but strictly within the realm of blockchain technology as a decentralized ledger.

When asked about the possibility of the SEC approving an Ethereum spot ETF following Bitcoin, Chairman Gary Gensler did not provide a clear answer. Instead, he stated:

"What we've done this week is for a type of asset that's been determined not to be a security, namely Bitcoin. Previously, we also recognized similar basket exchange-traded funds for gold and silver. It applies only to an asset that's not a security."

Gensler's statement implies skepticism towards the prospects of an Ethereum spot ETF, as he previously stated that he views Bitcoin as a commodity, while other cryptocurrencies, including Ethereum since its transition to Proof-of-Stake, may be considered securities. The SEC has listed 52 tokens as securities in various lawsuits throughout 2023.

In October 2023, the SEC approved the first batch of Ethereum futures ETFs.

The sentiment among crypto investors has shifted following the approval of Bitcoin spot ETFs, leaning towards optimism that an Ethereum spot ETF may soon follow. This is reflected in BTC's price adjustment to $43,200 on the evening of January 12th after peaking near $48,000 USD, while ETH has seen growth of nearly 25% during the week.

Ethereum's momentum has also been bolstered by comments from BlackRock CEO Larry Fink on the evening of January 12th, suggesting that the introduction of Ethereum spot ETFs would add value to the market.

In addition to BlackRock, organizations submitting Ethereum spot ETF proposals to the SEC include VanEck, ARK Invest, Grayscale, Hashdex, Invesco, and Fidelity, with the final deadline for the first proposals set for May 2024.

Proposals for Ethereum spot ETFs awaiting SEC approval. Source: Bloomberg (30/11/2023)