Bloomberg Expert Lowers Chances of Ethereum ETF After This Development

Bloomberg ETF expert James Seyffart has conveyed skepticism regarding the approval of Spot Ethereum exchange-traded fund (ETF). According to him, the United States Security and Exchange Commission (SEC) will likely dismiss the applications because it classifies Ethereum as security. 

“Looks like odds just went up for SEC to deny Ethereum ETFs by claiming #Ethereum is a security. Not a guarantee that they will do this but I think this almost guarantees that the SEC is at least considering it,” the analyst said.

SEC to Deny Spot Ethereum ETF?

The regulator body’s decision regarding various applications of spot Ethereum ETFs is expected on May 25th. However, based on the SEC’s move to classify Ethereum as security, the analyst said that there is a high possibility that the regulator will deny this product because those spot filings are improperly filed as commodity-based trust shares and do not qualify if they are holding security.

Seyffart’s recent pessimistic opinion regarding spot Ethereum ETF approval in May is not foreign. Other renowned market analysts have shared similar views. One of which is Standard Chartered Bank which revised its optimistic outlook for the products last month. Also, Bloomberg senior ETF analyst Eric Balchunas said his odds for May approval remain pessimistic at 25%, down from 70% in January.

SEC to Classify ETH as Security

The SEC, under the administration of its chairman Gary Gensler, is known for its cautious stance toward cryptocurrency-related products. The regulator has stood on its conviction that Ether is a security, a financial instrument that can include stocks, bonds, notes, and more. These assets must be registered with the U.S. SEC before being offered to local investors.

Last month, Consensys, a software company known for supporting the Ethereum blockchain, sued the SEC stating an “unlawful power grab” involving Ethereum. As per the report, the company wants a federal court to rule that ETH is not security, a declaration by former SEC chairman, Jay Clayton. 

Meanwhile, if the SEC successfully terms the Ether coin as a security, the pending spot Ethereum ETF applications may likely be delayed or turned down. At press time,  the second-largest cryptocurrency Ethereum (ETH) trades at $2,946, representing a 2.0% decrease in the last 24 hours.