Fidelity Takes Major Step Toward Launching Spot Ethereum ETF

As per the recent SEC filings, Fidelity has made the critical form submission of Form S-1 with the United States Securities and Exchange Commission (SEC) seeking consent to offer a spot Ethereum exchange-traded fund (ETF) with staking features. This registration is Fidelity’s first for the Ethereum ETF product.

This was confirmed by Bloomberg analyst James Seyffart, who said, “This is not a change; this is the company’s first application. The only previous application was 19b-4.” This is an earlier stage of the procedure.

Yes, @Fidelity filed the S-1 for their #ethereum ETF this morning. This is not an amendment this is their first. They had only filed a 19b-4 until today. https://t.co/stuKa4ZlSh pic.twitter.com/FiVJ08JwF8

— James Seyffart (@JSeyff) March 27, 2024

While this constitutes a forward-looking development, he doubts that the SEC would approve Fidelity to establish their Ethereum ETF. “This doesn’t affect the current scenario, though. We still consider we might see permission for Brexit next May,” he was not certain.

Seyffart’s hesitancy about the bet stemmed from his belief that the SEC was becoming less likely to approve any spot Ethereum ETFs in May.. He pointed to the lack of substance that input from US regulators and possible ETF organizers had been responsible for a likely decision.

Spot Ethereum ETF Decision Looms as SEC Deadline Nears

Similarly, the SEC postponed its rulings on many companies’ spot ETH ETF applications already before. While the agency is given a deadline of May 23 for making the final decision, there are at least two applications.

In addition to Fidelity, six other major corporations have revealed plans to develop an Ethereum ETF: BlackRock, Galaxy with Invesco, Grayscale, VanEck, Ark with 21Shares, and Hashdex. The Form S-1 filing is critical because it is the SEC’s registration of public corporations to facilitate the listing of new securities issued by them on national markets.

Should the ETF get the approval, a spot Ethereum ETF would be an instrument that allows investors to gain regulated access to the second largest crypto via it without having to buy the crypto physically. Nevertheless, the SEC has always been fine, as they refer to market manipulations and investor protection challenges.

With market participants and policymakers keenly awaiting the SEC’s decision by May 23, the question of spot Ethereum ETFs remains unanswered. The institutional attention highlights the regulation of crypto investment products.

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