The crypto community’s anticipation for altcoin ETFs faces another setback as the U.S. Securities and Exchange Commission (SEC) postpones key decisions, echoing Bitcoin’s arduous path to approval. Here’s the latest as of July 2024:
SEC Delays Ethereum ETF Verdicts
The SEC has again deferred rulings on spot Ethereum ETF applications from BlackRock, Fidelity, and Grayscale, pushing deadlines to August 2024. Regulators cited the need for “additional public feedback” on market manipulation risks, custody solutions, and Ethereum’s regulatory classification. Chair Gary Gensler reiterated concerns about investor protection, emphasizing the SEC’s “methodical approach” amid debates over whether Ethereum qualifies as a security. This follows May 2024 delays, where the SEC requested exchanges to revise filings, signaling unresolved compliance issues.
Altcoin ETF Proposals Stagnate
Applications for Solana (SOL), XRP, and Cardano (ADA) ETFs remain in limbo. The SEC’s hesitancy stems from legal uncertainties, including Ripple’s ongoing lawsuit over XRP’s security status. Unlike Bitcoin, classified as a commodity by the CFTC, altcoins lack clear regulatory frameworks. Analysts now predict 2025 as the earliest window for non-ETH altcoin ETF approvals, contingent on political shifts or landmark legal rulings.
Global Approvals Contrast U.S. Caution
While the U.S. stalls, Canada and Brazil approved Ethereum futures ETFs in Q1 2024, and Hong Kong’s Securities and Futures Commission (SFC) launched Bitcoin and Ethereum ETFs in April, attracting $300M inflows. These approvals highlight diverging global strategies, with the EU’s MiCA regulations further pressuring the SEC to clarify its stance.
Market Reactions: Volatility Meets Resilience
ETH dipped 8% post-May delay but rebounded as institutional investors accumulated holdings. CME Group reported record ETH futures open interest ($9B), signaling sustained confidence. “Delays aren’t denials—they’re part of the process,” noted Bloomberg’s James Seyffart, drawing parallels to Bitcoin’s 7-year ETF journey.
Behind the Delays: Surveillance and Custody Hurdles
The SEC mandates surveillance-sharing agreements (SSAs) with regulated markets to deter fraud—a challenge for altcoins with less mature ecosystems. Custody solutions also remain a sticking point, as few institutions meet the SEC’s stringent requirements for safeguarding digital assets.
