SEC Delays Fidelity's Ether ETFs, Direxion Steps into Bitcoin Arena

Friday, 19/01/2024 | 10:27 GMT by Tareq Sikder

The SEC delays Fidelity's Ether ETF decision to March 5, 2024, for further evaluation.

Industry opinions differ on the likelihood of the SEC's approval for spot Ether ETFs.

The United States Securities and Exchange Commission (SEC) has announced a 45-day extension to its deliberation period for asset manager Fidelity's Ether exchange-traded funds (ETFs). The regulatory body cited the need for sufficient time to evaluate the proposed rule change and address related concerns. The new decision date is set for March 5, 2024.

Analyst Insights on SEC Delay and Speculations for Spot Ether ETFs

The Bloomberg ETF analyst, James Seyffart expressed little surprise at the delay, stating in a January 18 Twitter post that the significant dates to watch are likely in late May. He referred to the SEC's final deadline of May 23 for approving or denying VanEck's Ether ETF. Seyffart and some analysts speculate that the SEC might approve multiple spot Ether ETFs simultaneously, mirroring its approach to spot Bitcoin ETFs.

Meanwhile, Direxion has joined the race by filing for five Bitcoin ETFs with the SEC on January 18. ProShares and REX Shares, among other rivals, have entered the fray. ProShares submitted five leveraged Bitcoin-tracking ETFs on January 16, while REX Shares filed for six leveraged Bitcoin ETFs on January 3.

Direxion's filing outlines plans for 1x, 1.5x, and 2x long leveraged Bitcoin funds, along with corresponding short leveraged funds. Bloomberg's ETF analyst, Eric Balchunas, commented on Twitter: "Leveraged Bitcoin ETFs may soon outnumber long only. Pretty sure that's never happened [before]."

Bitcoin as Commodity, Ether's Uncertain Regulatory Future

Opinions within the industry vary on the likelihood of the SEC approving spot Ether ETFs. Balchunas expressed optimism, placing a 70% chance of approval by May, considering the SEC's final deadline for VanEck's fund. However, Mark Yusko, the Co-Founder and CEO of Morgan Creek Capital, offered a more cautious perspective. He argued that the SEC remains hostile towards cryptocurrencies, suggesting the possibility of classifying Ether as a security, unlike Bitcoin, which the SEC's Chair, Gary Gensler, has previously categorized it as a commodity.