SEC delays Fidelity’s Ethereum spot ETF, but decisions still expected in May

The US Securities and Exchange Commission (SEC) said on January 18 that it has postponed its decision on Fidelity’s proposed spot Ethereum ETF.

More specifically, the decision concerns a proposed rule change that would allow Cboe BZX to list and trade shares of Fidelity’s planned fund.

The SEC noted that the proposed rule change was originally filed on November 17, 2023 and published in the Federal Register for comment on December 6, 2023.

The SEC said today that based on these dates it was previously required to approve, deny or initiate proceedings to determine whether the proposed rule change should be disapproved by January 20. However, the SEC has now opted to use a provision that allows it to extend that deadline by 45 days until March 5, 2024.

It is likely that the SEC will choose to initiate proceedings against Fidelity in March, as it has done for certain other current funds.

The SEC is expected to make a decision on ETH ETFs in May

Bloomberg ETF analyst James Seyffart said today that the Fidelity delay was “fully expected” and claimed that late May deadlines “really matter.”

That May deadline appears to be related to the fact that the SEC must approve or reject VanEck’s competing Ethereum ETF proposal by May 23.

Because the SEC has already initiated proceedings on VanEck’s application, it cannot further delay its decision. And because the SEC generally approves similar ETFs together, it will likely make a decision on all pending spot Ethereum ETFs by the end of May, even if other applications have a later deadline.

It should also be noted that Fidelity, VanEck and several other applicants managed to get approval for spot Bitcoin ETFs on January 10. The success of those Bitcoin ETFs does not guarantee that Ethereum ETF proposals will also receive approval.

Public expectations are divided, with one prediction market on Polymarket currently reporting 54% odds in favor of spot Ethereum ETF approvals.