SEC Delays Decision on Hashdex Ethereum ETF as Optimism Wanes

The Securities and Exchange Commission (SEC) has postponed its decision to approve the Hashdex Nasdaq Ethereum (ETH) exchange-traded fund (ETF). If approved, the Hashdex ETF will hold spot Ether and futures contracts. In a notice filed on Tuesday, the SEC stated that it would extend its decision deadline to May 30, 2024.

The SEC explained, “The Commission finds it appropriate to designate a longer period to issue an order approving or disapproving the proposed rule change, allowing sufficient time to consider the proposed rule change and the issues raised.”

In September, the Nasdaq stock exchange filed with the SEC to list the Hashdex Nasdaq Ethereum ETF. Toroso Investments registered as a commodity pool operator with the Commodity Futures Trading Commission and a National Futures Association member manages and controls the fund. The SEC has repeatedly delayed deciding on the ETF and requested public comments in December.

Additionally, the SEC announced on Tuesday that it was delaying its decision on the ARK 21Shares Ethereum ETF, which would track the performance of ether, until May 24, 2024. The SEC is also seeking public comments on this application.

Spot Ethereum ETFs Approval Chances

Major players like Fidelity and BlackRock have recently applied for a spot in Ethereum ETF. However, hopes of the SEC approving such a product have decreased steadily over the past few weeks. Bloomberg ETF analyst Eric Balchunas recently lowered his estimate of the approval chances for a spot Ethereum ETF by May from around 70% to 30%.

Fellow Bloomberg analyst James Seyffart said Tuesday’s delays were expected. “These were always going to be delay orders. The only deadline that matters is May 23,” Seyffart posted on X.

My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round. The SEC hasn't engaged with issuers on Ethereum specifics. Exact opposite of #Bitcoin ETFs this fall. https://t.co/TyAzAOrAC5

— James Seyffart (@JSeyff) March 19, 2024

Seyffart also expressed doubt that spot Ethereum ETFs would get approved. “My cautiously optimistic attitude for ETH ETFs has changed from recent months,” he wrote on X Tuesday. “We now believe these will ultimately be denied May 23 for this round. The SEC hasn’t engaged with issuers on Ethereum specifics, and this is the exact opposite of bitcoin ETFs this fall.”

The SEC has greenlit an ether futures-like ETF before, but not a spot ether ETF or mixed product. Last October, nine futures-based ether products were launched after simultaneous approvals. As the May 23rd decision deadline nears, major firms await the SEC’s verdict on bringing a spot Ethereum ETF to market amid lowered expectations.

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