VanEck CEO Predicts SEC Rejection of Spot Ethereum ETF Application in May

Jan
van
Eck,
the
Chief
Executive
Officer
of
VanEck,
recently
gave
an
interview
in
which
he
stated
his
scepticism
over
the
approval
of
a
spot
Ethereum
exchange-traded
fund
(ETF)
by
the
United
States
Securities
and
Exchange
Commission
(SEC)
in
May.
Together
with
Cathie
Wood’s
ARK
Invest,
VanEck
was
one
of
the
first
companies
in
the
United
States
to
submit
an
application
for
a
spot
Ethereum
exchange-traded
fund
(ETF).
Van
Eck,
on
the
other
hand,
is
of
the
opinion
that
their
application
will “probably
be
rejected”.

The
Regulatory
Process
and
the
Absence
of
Communication

During
his
presentation,
Van
Eck
brought
attention
to
the
regulatory
procedure
and
explained
that
regulators
provide
feedback
on
the
application.
Concerns
have
been
expressed
over
the
introduction
of
an
Ethereum
exchange-traded
fund
(ETF)
due
to
the
fact
that
there
has
been
a
significant
absence
of
input
on
Ethereum.
Jean-Marie
Mognetti,
the
CEO
of
CoinShares,
is
of
the
same
opinion,
and
he
has
said
that
he
does
not
see
any
approvals
taking
place
in
the
near
future.

Market
Behaviour
and
the
Uncertainty
of
the
Regulatory
Climate

There
has
been
a
protracted
period
of
silence
on
the
part
of
the
SEC
about
the
seven
applications
that
are
now
pending
for
spot
Ethereum
exchange-traded
funds,
which
has
caused
confusion
in
the
market.
The
Securities
and
Exchange
Commission
(SEC)
has
taken
a
cautious
approach
to
its
regulatory
posture,
with
a
particular
emphasis
on
the
federal
securities
laws,
as
stated
by
Chair
Gary
Gensler.
In
particular,
Ethereum’s
transition
to
the
proof-of-stake
consensus
mechanism
raises
regulatory
problems
that
need
to
be
addressed.
These
challenges
are
brought
about
by
the
unique
nature
of
Ethereum.

Impact
on
the
Market
and
the
Attitude
of
Investors

There
has
been
a
robust
market
for
Ethereum,
with
the
price
of
Ethereum
remaining
relatively
stable
at
roughly
$3,700.
This
is
despite
the
difficulties
that
authorities
have
encountered.
Not
only
would
the
approval
of
an
Ethereum
exchange-traded
fund
(ETF)
provide
more
investment
opportunities,
but
it
would
also
have
the
ability
to
affect
the
price
and
liquidity
of
Ethereum.
Investors
and
market
players
are
keeping
a
close
eye
on
the
progress
since
it
has
the
potential
to
establish
a
standard
for
future
cryptocurrency
exchange-traded
funds.

Final
Thoughts

Both
Jan
van
Eck,
CEO
of
VanEck,
and
Jean-Marie
Mognetti,
CEO
of
CoinShares,
have
voiced
their
reservations
with
the
SEC’s
decision
to
approve
a
spot
Ethereum
exchange-traded
fund
(ETF)
in
the
month
of
May.
The
legal
environment,
the
absence
of
feedback,
and
the
one-of-a-kind
characteristics
of
Ethereum’s
consensus
process
have
all
contributed
to
their
unease
with
the
cryptocurrency.
Even
if
an
Ethereum
exchange-traded
fund
(ETF)
has
been
approved,
the
market
effect
and
investor
mood
around
it
are
yet
unknown.

Image
source:
Shutterstock