The U.S. Securities and Exchange Commission (SEC) has extended the deadline for making a decision on Fidelity’s proposal for a spot Ethereum exchange-traded fund (ETF) to March 5, as indicated in a filing on Thursday.
This delay coincides with the submission of five other applications for leveraged Bitcoin ETFs seeking approval from the SEC.
SEC Delays Decision on Fidelity ETF
The SEC has justified the extension of the deadline for deciding on Fidelity’s proposed Ethereum ETF until March 5 in its latest filing, stating it requires additional time to evaluate the proposed rule change and the associated issues thoroughly.
Fidelity submitted the application for the Ethereum Fund in November. In its proposal, Fidelity referenced a court ruling from the previous year, where judges criticized the SEC for lacking a coherent reason to reject spot crypto ETFs while permitting futures-based products.
Initially, the SEC was obligated to approve, reject, or initiate proceedings regarding the proposed rule change by January 20. However, the commission has chosen to utilize a provision allowing a 45-day extension.
Bloomberg ETF analyst James Seyffart said on X that he anticipated the delay, noting that the significant dates to watch are in late May. He highlighted the SEC’s final deadline of May 23 to approve or deny VanEck’s Ether ETF.
Seyffart suggested that the SEC might approve multiple pending spot Ether ETFs simultaneously, similar to its approach with spot Bitcoin ETFs.
Considering the SEC has already initiated proceedings on VanEck’s application, it cannot further delay its decision.
Optimism for Imminent Ethereum ETF Approval
Last week, the SEC approved 11 spot Bitcoin ETFs to commence trading. This decision, widely celebrated in the market, has sparked optimism that approval for a spot Ethereum ETF is imminent.
Stuart Barton, Co-founder at Volatility Shares, expressed confidence in the likelihood of a spot Ethereum ETF approval, pointing to the agency’s authorization of futures-based ETFs.
Barton suggested that the SEC’s decision to allow the listing of futures-based ETFs indicates a similar approach to Ethereum as they have for Bitcoin. He inferred that the commission is likely considering Ethereum as not being a security and is not inclined to regulate it in that manner.
While Fidelity awaits a decision from the SEC on its Ethereum ETF proposal, Direxion has entered the scene by filing for five Bitcoin ETFs. This move follows filings by ProShares, which sought approval for five leveraged Bitcoin-tracking ETFs on January 16, and REX Shares, which filed for six leveraged Bitcoin ETFs on January 3.
Direxion’s filing outlines plans for 1x, 1.5x, and 2x long leveraged Bitcoin funds, along with one each for short leveraged funds.