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- SEC has extended its deliberation period for Fidelity’s Ethereum spot ETF by another 45 days, adding to the growing line of companies pushing to be the first to launch the product.
- Leveraged Bitcoin spot ETFs continue attracting interest, with Direxion filing applications for six as experts say they could outpace long-only ETFs for the first time ever.
The US SEC has pushed the deadline for approving an Ether spot ETF application by Fidelity by another 45 days as the race to become the first to launch the product heats up.
Fidelity filed its applications to list the first Ether spot ETF in November, and according to US laws, the SEC must issue its decision within 45 days of the filing. The 45th day would have been tomorrow, January 20. However, the laws also give the agency the right to extend the deadline by another 45 days, and the SEC has exercised this right.
“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 and the issues raised therein,” the watchdog said in its filing.
The filing, penned by Assistant Secretary Sherry Haywood, noted that the deadline will now be March 5, when the SEC must approve or reject the application. However, the agency can also kickstart proceedings to determine whether it should approve the proposed change.
These delays and postponements are nothing new. In the push for a spot ETF for Bitcoin, the agency kept pushing the deadlines repeatedly. It would then reject a batch of applications, after which the companies would file fresh ones, and the cycle would start again. Ultimately, and after a landmark court victory for Grayscale, Gary Gensler had no option but to give the green light.
According to Bloomberg’s ETF expert James Seyffart, the delay was “completely expected.”
Fidelity #ethereum ETF delayed just now. Completely expected. Dates that really matter are late May in my view. https://t.co/8mvhcPRaS7
— James Seyffart (@JSeyff) January 18, 2024
Seyffart and other industry gurus have pointed out that the critical date is May, when the SEC must decide on VanEck’s Ether ETF. However, even then, Gensler and other anti-crypto officials in the government could conspire to frustrate the Ethereum community, Anthony Scaramucci warned a week ago.
The biggest challenge for Ether is that it hasn’t received the security exemption that Bitcoin has. Since the Jay Clayton days, the SEC has been clear that Bitcoin isn’t a security. However, with Ether, the stance has shifted. Under Gensler, the agency has stated that only Bitcoin is guaranteed a clean bill of health.
Leveraged Bitcoin Spot ETFs Surge
While Ethereum struggles to get its first spot ETF, Bitcoin is seeing rapid growth in the sector. After the spot ETFs were approved, the momentum has now shifted to leveraged ETFs.
On Thursday, Virginia-based financial company Direxion filed applications for six leveraged Bitcoin ETFs. Leveraged ETFs use debt and financial derivatives to amplify the underlying returns. While these instruments have higher profit margins, the potential for losses is also amplified.
T-Rex files 6 leveraged and inverse Bitcoin ETFs
T-Rex 1.5X Inverse Spot Bitcoin Daily Target ETF
T-Rex 1.5X Long Spot Bitcoin Daily Target ETF
T-Rex 1.75X Inverse Spot Bitcoin Daily Target ETF
T-Rex 1.75X Long Spot Bitcoin Daily Target ETF
T-Rex 2X Inverse Spot Bitcoin Daily… pic.twitter.com/eLFTiS1Gq9— ETF Hearsay by Henry Jim (@ETFhearsay) January 3, 2024
As Bloomberg’s Eric Balchunas noted, leveraged BTC ETFs may soon outnumber the long-only ETFs for the first time in the world of ETFs.