Ethereum Spot ETF Approval Nears Crucial Moment as SEC Shifts Stance

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The race toward the first U.S. spot Ethereum exchange-traded fund (ETF) has entered a pivotal phase, with the Securities and Exchange Commission (SEC) signaling unexpected momentum. Recent developments suggest a potential 180-degree shift in regulatory posture—sparking market optimism, boosting ETH prices, and reigniting debates over the future of crypto asset regulation.

While the news has triggered a rally in Ethereum’s price—surpassing $3,600 and peaking near $3,693—the reality behind the headlines is more nuanced. Regulatory progress remains fragmented, politically charged, and far from guaranteed.

SEC Requests Accelerated 19b-4 Filings: A Strategic Move?

According to sources cited by CoinDesk, the SEC has asked major exchanges to expedite updates to their 19b-4 filings—regulatory submissions that detail proposed rule changes related to new financial products like ETFs. This procedural push suggests the agency may be preparing to approve at least the exchange-side applications by the May 23, 2024 deadline for VanEck’s proposal.

This move prompted Bloomberg Intelligence analysts Eric Balchunas and James Seyffart to raise their approval odds for a spot Ethereum ETF from 25% to 75%. However, they later clarified: this 75% probability refers specifically to the 19b-4 approval, not the full product launch.

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Understanding the Two-Part Approval Process

To bring a spot Ethereum ETF to market, issuers must clear two key regulatory hurdles:

This distinction is crucial. Even if 19b-4 approvals are granted by May 23, the SEC could still stall S-1 approvals for weeks or months—effectively delaying actual trading.

“We’re increasing our odds of spot Ether ETF approval to 75%... hearing chatter that SEC could be doing a 180 on this (increasingly political issue).”
— Eric Balchunas, Bloomberg Intelligence

Why the Sudden Shift? Politics Looms Large

Analysts increasingly believe the SEC’s apparent softening stance is less about regulatory conviction and more about political pressure.

With the 2024 U.S. presidential election approaching, cryptocurrency policy has become a bipartisan talking point. Former President Donald Trump has publicly pledged support for pro-crypto policies and even began accepting crypto donations for his campaign. Meanwhile, 12 Democratic senators recently joined Republicans in backing a resolution to overturn SEC Staff Accounting Bulletin (SAB) 121, signaling growing cross-party alignment on digital asset regulation.

These developments suggest regulators may be under pressure to appear cooperative—especially after courts previously ruled against the SEC in its resistance to spot Bitcoin ETFs.

Thus, approving 19b-4 filings while delaying S-1 reviews allows the SEC to appear responsive without committing to immediate product launches. This strategy—often referred to as a “delaying tactic”—lets the agency navigate political waters while retaining control over timing.

A History of Delays: From Bitcoin to Ethereum

The SEC’s handling of Ethereum ETFs mirrors its earlier treatment of Bitcoin ETFs—marked by repeated delays and procedural extensions.

Since March 2024, the SEC has postponed decisions on spot Ethereum ETF applications from major financial firms including:

Each delay extends the review period under a structured 240-day cycle divided into phases (45 + 45 + 90 + 60 days). At each juncture, the SEC can approve, deny, or postpone—typically choosing the latter until reaching the final deadline.

For VanEck, that final date is May 23, 2024. A rejection would force re-filing and reset the entire clock—potentially pushing approval into late 2024 or early 2025.

Legal experts note that sponsors are likely to sue the SEC if approvals are denied without clear justification, citing precedents set during the Bitcoin ETF battles. Courts have previously sided with issuers, compelling the SEC to act based on evidence rather than speculative risk concerns.

Is Ethereum Different? Regulatory Concerns Persist

Despite growing momentum, the SEC continues to voice unique concerns about Ethereum that weren’t as prominent with Bitcoin:

Matteo Greco, analyst at Fineqia International, noted in a recent report:

“Concerns over liquidity in both spot and futures markets, along with lingering classification risks, make rapid approval of ETH ETFs uncertain.”

Yet many industry leaders argue these differences are overstated.

Ophelia Snyder, President of 21Shares, emphasized:

“These applications are structurally identical to Bitcoin ETFs—same custodians, same disclosure standards, same internal frameworks.”

Moreover, international precedents add weight to the approval argument. In April 2024, Hong Kong approved multiple spot Ethereum ETFs, listing them on its stock exchange. Though trading volumes remain modest, this marks a significant regulatory milestone—and one U.S. policymakers may find hard to ignore.

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Core Keywords Integration

Throughout this analysis, key themes emerge that align with high-intent search queries:

These terms naturally reflect user interest in regulatory clarity, investment access, and market impact—all central to understanding Ethereum’s evolving institutional landscape.

Frequently Asked Questions (FAQ)

Will Ethereum ETFs be approved in 2024?

While not guaranteed, approval by late 2024 is increasingly plausible—especially if the SEC approves key 19b-4 filings by May 23. However, S-1 delays could push actual trading into early 2025.

What's the difference between 19b-4 and S-1 filings?

The 19b-4 is an exchange rule change proposal reviewed under strict deadlines. The S-1 is a securities registration statement with no mandatory approval timeline, giving the SEC significant leverage over final launch dates.

Why is the SEC treating Ethereum differently from Bitcoin?

The SEC cites Ethereum’s transition to proof-of-stake (PoS), staking rewards, and perceived governance structures as factors that may classify ETH as a security—unlike Bitcoin, which it views as purely commodity-like.

Can ETF issuers sue the SEC if rejected?

Yes. Precedent exists: Grayscale successfully sued the SEC over its Bitcoin ETF denial. Similar legal action is expected if Ethereum ETFs face unjustified rejections.

How did Hong Kong’s Ethereum ETF approval impact U.S. chances?

While not binding, Hong Kong’s move demonstrates global regulatory acceptance and may pressure U.S. authorities to avoid falling behind in financial innovation.

What happens if VanEck’s 19b-4 is rejected on May 23?

A rejection would require re-filing and restart the 240-day clock—likely delaying all other pending applications and pushing approvals into 2025 unless legal action forces acceleration.

The path to a U.S. spot Ethereum ETF remains uncertain—but undeniably closer than ever before. With political winds shifting and global precedents mounting, the SEC faces mounting pressure to act decisively. Whether it chooses speed or strategy will shape not only Ethereum’s financial future but also America’s role in the global crypto economy.

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