SEC Postpones Ruling on Hashdex NASDAQ and ARK 21Shares Ethereum ETFs

The U.S. Securities and Exchange Commission (SEC) has extended its decision timeline regarding the approval of the Hashdex Nasdaq Ethereum ETF until May 30, 2024, according to an announcement on Tuesday.

This ETF, if approved, would include both spot ether and futures contracts in its portfolio. The decision to delay comes as the SEC seeks additional time to thoroughly evaluate the proposed rule change and the concerns it raises.

The application for the Hashdex Nasdaq Ethereum ETF was initially submitted by the Nasdaq stock exchange in September, with Toroso Investments managing the fund. Toroso Investments is registered with the Commodity Futures Trading Commission as a commodity pool operator and is a member of the National Futures Association. This delay marks another instance where the SEC has postponed making a decision on this ETF, following a call for public comments in December.

Furthermore, the SEC also announced on Tuesday a similar postponement for the ARK 21Shares Ethereum ETF, pushing the decision date to May 24, 2024. This ETF aims to track the performance of ether directly. The regulatory body is also inviting public comments on this application, continuing its cautious approach towards the approval of cryptocurrency-based financial products.

The delay in decisions comes amid declining optimism for the approval of spot Ethereum ETFs, with industry analysts adjusting their expectations. Bloomberg ETF analyst Eric Balchunas reduced his estimate for the approval likelihood of a spot Ethereum ETF by May from 70% to 30%. His colleague, James Seyffart, pointed out that such delays were expected, indicating a cautious outlook for the approval of Ethereum ETFs in the current round of considerations.

Notably, while the SEC has previously approved ether futures-like ETFs, it has yet to approve a spot ether ETF or a mixed one, contrasting with its actions regarding Bitcoin ETFs last fall.

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