SEC delays making a decision on the Hashdex and Ark 21Shares Ethereum ETFs

The Securities and Exchange Commission has delayed its decision timeline on whether it will approve the Hashdex Nasdaq Ethereum ETH -2.11% exchange-traded fund. 

If approved, the Hashdex ETF will hold spot ether and futures contracts. In a notice filed on Tuesday, the SEC said it would be extending its time to make a decision to May 30, 2024.

"The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein," the SEC said. 

The Nasdaq stock exchange filed with the SEC to list the Hashdex Nasdaq Ethereum ETF in September. The fund is managed and controlled by Toroso Investments, registered as a commodity pool operator with the Commodity Futures Trading Commission and a member of the National Futures Association. The SEC has delayed making a decision on the ETF a few times and asked for public comments in December. 

The SEC also said in a notice on Tuesday it was delaying making a decision on the ARK 21Shares Ethereum ETF, which would track the performance of ether, to May 24, 2024. The SEC is also asking for public comments on that application.  

Spot Ethereum ETFs

Big-name firms, such as Fidelity and BlackRock, have applied for a spot Ethereum ETF over the last few months. Optimism for the SEC approving such a product has steadily fallen over the past few weeks. Bloomberg ETF analyst Eric Balchunas recently dropped his estimate of the chances of a spot Ethereum ETF approval by May from about 70 percent to 30 percent. 

Fellow Bloomberg ETF analyst James Seyffart said the delays on Tuesday were expected. 

"These were always going to be delay orders. The only deadline that matters is May 23rd," Seyffart posted on X on Tuesday. 

Seyffart also said he expected spot Ethereum ETFs to be denied. 

"My cautiously optimistic attitude for ETH ETFs has changed from recent months," Seyffart posted on X on Tuesday. "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." 

The SEC has approved an ether futures-like ETF before, but not a spot ether ETF or a mixed one. In October, nine futures-based products were approved at the same time, marking their debut.