Industry sources cited by Reuters have indicated that the US Securities and Exchange Commission (SEC) is likely to reject applications for Ethereum-based spot exchange-traded funds (ETFs) next month. If the SEC’s decision is negative, experts believe it could have a significant impact on ETH, the leading altcoin.
The SEC is expected to make its final decision on the applications from a consortium that includes BlackRock, VanEck, ARK Investment Management, and seven other organizations on May 23 and 24. Sources close to the matter have revealed that the SEC, after mandatory discussions with the parties involved in recent weeks, is preparing to deny the requests to offer an Ethereum-based spot ETF.
The crypto world is eagerly awaiting the SEC’s decision on Ethereum-based spot ETFs. However, indications that the SEC will issue a denial suggest potential setbacks for applicants and the cryptocurrency market, highlighting the regulatory hurdles faced when introducing new crypto-based financial investment tools.
The expected denial of applications for Ethereum spot ETFs is due to increased scrutiny surrounding the regulatory framework governing financial products related to ETH. The SEC’s classification of Ethereum as a security remains the biggest obstacle for the altcoin in the cryptocurrency market.
On the other hand, a negative decision from the SEC on spot ETFs could cause a significant downturn for ETH. Although experts have already priced in more rejections than approvals, an official denial from the US regulator could keep prices under pressure and lead to a sharp decline.
Prior to the news of the likely denial, ETH was already trading down about 3%, and the selling pressure intensified following Reuters’ report. At present, the altcoin is trading at $3,084, down 5.63% over the last 24 hours. Experts argue that the $3,000 level is a critical threshold for ETH, and for the decline to be halted, the price needs to stay above this threshold.
Disclaimer: This article does not constitute investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.