The approval of Ether futures exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC) last year hinted at their acceptance of Ether as a commodity. Bloomberg ETF analyst James Seyffart suggested during a recent private webinar that this implicit acceptance might pave the way for a spot ETF variant in the upcoming year. Seyffart referred to the SEC's approval of Ether futures ETFs in October 2023 and highlighted that the SEC did not contest the classification of Ether during the ETF registration process with the Commodity Futures Trading Commission (CFTC).
Seyffart pointed out that the CFTC's clear stance on Ethereum as a commodity contrasts with the SEC's ambiguity. Despite Gary Gensler's reluctance to explicitly label Ethereum as a security or commodity, Seyffart argued that the approval of Ethereum futures ETFs indirectly acknowledges Ethereum futures as commodity futures.
The introduction of the first Ether futures ETFs in the U.S. took place on Oct. 2 through various investment firms. Seyffart emphasized the potential legal repercussions if the SEC were to challenge Ether's status as a security, noting that such a move could lead to the delisting of futures ETFs.
Distinguishing between securities and commodities in ETFs holds significance due to varying legal requirements, taxation, and regulatory obligations. Seyffart highlighted the potential conflict the SEC might face if it contradicts the classification made by the CFTC.
Considering recent legal precedents and impending decision deadlines, Seyffart speculated that Ethereum ETFs might receive approval in the coming year. The SEC has a final decision deadline for spot Ether ETFs by May 2024, with other deadlines following suit in subsequent months.
Before addressing these Ether ETF decisions, the SEC must rule on spot Bitcoin ETFs. Seyffart predicted an approval by Jan. 10, forecasting a substantial influx of $10 billion into Bitcoin ETFs within a year of approval.
