The U.S. Securities and Exchange Commission (SEC) is closing in on a decision date for a highly anticipated Bitcoin ETF, which could have significant implications for the wider crypto market, including Ethereum. Market optimism is high regarding the potential approval of a Bitcoin ETF, seen as a bellwether for other crypto-based ETF products.
Approval of a Bitcoin ETF could set a regulatory precedent, easing the path for other crypto-based ETFs and potentially establishing a framework applicable to other cryptocurrencies, including Ethereum. In December, the SEC postponed decisions on several pending Ethereum ETF applications in the U.S. to May 2024.
The delay is part of the SEC’s process to gather public input before making a decision on these ETF applications. This is happening amid the SEC’s consideration of classifying some proof-of-stake (PoS) cryptocurrencies as securities, which could impact regulatory approaches.
Ethereum has not been labeled as a security in the SEC’s recent actions against crypto exchanges, and the SEC has not objected to Ethereum’s classification through the Commodity Futures Trading Commission (CFTC) ETF registration process. This suggests a potential for an approved spot Ethereum ETF product in the U.S. by May 2024, which could positively influence Ethereum’s price.
While there is speculation about a Bitcoin ETF approval being a “sell the news” event, Ethereum’s price is well-positioned for a rally due to its consistent correlation with Bitcoin’s price in recent years. An approval could signify a substantial increase in crypto investment among traditional investors, potentially driving up Ethereum’s price. However, any delays or rejections could cause short-term bearish pressure as the market adjusts to the setback. A recent survey by Bitwise revealed that only 39% of U.S.-based financial advisors expect a Bitcoin ETF to be approved this year.