The recent success of Bitcoin ETFs, leading to a price surge past $60,000, has sparked discussions about the potential for Ethereum-based ETFs. However, lawyer and cryptocurrency expert Jake Chervinsky cautions that such optimism might be premature, suggesting the U.S. Securities and Exchange Commission (SEC) may not grant approval for Ethereum ETFs. Chervinsky points to the SEC’s history of aligning with political pressures and its current stance on cryptocurrencies, implying that the regulator might reject Ethereum ETF applications to maintain control over the burgeoning market.
Evaluation of SEC’s Decision-Making
Chervinsky emphasizes that the SEC could use debatable legal arguments to deny the Ethereum ETF applications, reflecting its tendency to uphold political goals over strict legal interpretations. He notes the heightened market sensitivity due to the volatility instigated by ETF approvals, with the valuation of cryptocurrencies being swayed more by investor sentiment than by their actual worth.
Insights on Market Oversight and BlackRock
The lawyer anticipates a cautious approach by the SEC, especially given Ethereum’s uncertain legal classification, and predicts that the Commission will likely reject ETF proposals to retain market oversight. Although BlackRock’s interest in Ethereum ETFs has been viewed positively, given the firm’s track record with successful ETF applications, Chervinsky warns that the SEC might still prompt issuers like BlackRock to withdraw their applications. He speculates that BlackRock’s influence and collaboration with the SEC will play a role, but they will comply if asked to retract their proposals.
This outlook is in line with recent indicators of the SEC’s uneasy relationship with digital currencies, as well as the regulator’s pattern of cautious engagement with cryptocurrency-related products. The market, hopeful for a positive decision, now awaits the SEC’s verdict on the future of Ethereum ETFs.