Right after the historic approval and listing of 11 Bitcoin ETFs for trading this week, excitement has spread to the Ethereum community that an ETH ETF might be on the horizon.
But for those concerned about too many celebrations in one week, fear not as SEC Chairman Gary Gensler seems unlikely to allow that to happen.
In a recent interview with CNBC, Gensler gave little encouragement when asked whether an Ethereum ETF could soon be approved by the SEC.
“I view what we did this week as a basis for a commodity-type asset like Bitcoin. Just like the ETPs on silver and gold have been approved earlier, this is just a basis for a commodity-type token.”
Gensler declined to comment further on an Ethereum ETF. But his choice of words suggests that by emphasizing his view of Bitcoin as a commodity, the SEC Chairman may be trying to draw a line between the unchallengeable status of Bitcoin as a commodity and the potential status of all other cryptocurrencies, including Ethereum, as securities.
For years, Gensler has repeatedly stated that Bitcoin is the only cryptocurrency he sees as a definite commodity, meaning it falls outside the SEC’s jurisdiction.
While the SEC has not made any official statements about the security status of Ethereum, the agency has previously signaled in legal filings that it views all Ethereum transactions as within its jurisdiction.
If the SEC were to view Ethereum as a security, it could potentially take a more hostile stance towards an Ethereum ETF than a Bitcoin ETF – which has been rejected for many years before being essentially forced to do so by a federal appellate court.
However, a similar court decision could also compel the SEC to approve an Ethereum ETF. As Gensler noted in his statement on the approval of the Bitcoin ETF this week, the “landscape” around cryptocurrency ETFs has “changed” due to legal rulings.
The SEC has been ordered to review Grayscale’s Bitcoin ETF registration in October because, the judges found, they cannot arbitrarily reject a Bitcoin ETF after approving a Bitcoin futures ETF. The SEC approved an Ethereum futures ETF that same month, potentially setting up a parallel legal scenario.
Futures-based ETFs track the price of derivative contracts giving the buyer the ability to buy or sell Bitcoin on a future date. No actual Bitcoin is bought and sold when futures-based ETFs are traded. This is different with spot ETFs; their issuers actually buy and hold Bitcoin on behalf of clients.
Ethereum surged this week on the back of the excitement from the approval of Bitcoin ETFs, with hopes that an Ethereum ETF may be next. The token hit $2,700 for the first time since April 2022 after BlackRock CEO Larry Fink said he sees value in an Ethereum ETF and views this week’s events as “just the beginning.”
