Why did the SEC delay its decision on the Ethereum ETF listing?
- The SEC has delayed its decisions on BlackRock and Bitwise Ethereum ETF options until November. Ethereum ETFs face $624.4 million in outflows, led by Grayscale’s Ether ETF.
The U.S. Securities and Exchange Commission (SEC) has extended its timeline for reviewing Nasdaq’s proposal to list and trade options on BlackRock’s iShares Ethereum [ETH] Trust (ETHA).
Blackrocks’ ETHA gets delayed
Initially set for a decision by the 26th of September, the SEC has now postponed its ruling until the 10th of November.
In a statement released on the 24th of September, the agency explained that the delay would provide additional time to evaluate the potential impact of this listing on market stability and ensure a thorough review of its implications for the broader financial landscape.
The press release added,
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.”
What’s behind this?
Under Section 19(b)(2) of the Securities Exchange Act, the SEC has the authority to delay its decision on proposals for up to 90 days.
This extension provides the regulator with additional time to thoroughly assess potential market risks and stability before making a final ruling.
By doing so, the SEC ensures a comprehensive review of any implications the decision may have on the broader financial landscape.
In a separate development, the U.S. SEC has also deferred its decision on NYSE American’s proposal to list and trade options for Bitwise’s spot Ethereum ETFs, including the Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust.
The deadline for this decision has been pushed to 11th November.
Blackrock’s IBIT gets a nod
In a seemingly contrasting move, the SEC recently approved Nasdaq’s request to list and trade options for BlackRock’s spot Bitcoin [BTC] ETF.
On the 20th of September, the SEC officially greenlit options trading for the iShares Bitcoin Trust, which will trade under the ticker symbol IBIT.
According to Nasdaq, these options will be available for trading under the same conditions and regulations as other ETF options, further expanding the investment opportunities surrounding Bitcoin.
Is Ethereum ETF performance to be blamed?
That being said, Ethereum ETFs have experienced a significant outflow since their launch, with a cumulative outflow of $624.4 million, largely driven by Grayscale’s Ether ETF (ETHE).
The outflows have been particularly notable in recent weeks, with the 23rd of September marking the largest net outflow since July, as $79 million was withdrawn.
Grayscale’s ETHE led this decline, seeing a staggering $80.6 million outflow in a single day, the largest since spot Ether ETFs debuted earlier this year.
Despite occasional inflows, the overall trend remains one of heavy withdrawals from these funds.
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