Ether is showing weakness against bitcoin (BTC) amid a bad omen that the market shows by discounting (that is, anticipating and acting on it).
Expectations are growing that the SEC, the US stock market regulator, will not authorize the launch of exchange-traded investment funds (ETFs) based on ether.
“I'm not happy to be an Ethereum ETF bear,” said Jake Chervinsky, attorney and chief legal officer at venture capital firm Variant Fund. “I want them to be approved,” he added. However, he reiterated that this may not happen, as he warned on other occasions this year.
He elaborated that what he sees is that, in general, the SEC does not like cryptocurrencies as a concept. “He sees no value in the technology and believes that attacking it is politically advantageous,” she says.
Additionally, he mentioned that the regulator seeks to please progressive elected officials and outside observers who have made the fight against cryptocurrencies a central part of their careers and have openly criticized it for approving bitcoin (BTC) ETFs.
In addition to this, Chervinsky maintained that the SEC “has an erroneous, but not unreasonable, basis for denying the spot/futures correlation.” In this sense, he considers that he could propose new reasons for the denial of the Grayscale ruling , which would be subject to a judicial challenge.
The ruling refers to Grayscale's judicial victory in its lawsuit against the SEC, which accused it of unfoundedly rejecting the launch of its bitcoin ETF. After this event, the regulator gave the green light to instruments of this type.
Chervinsky said the SEC “is willing to take litigation risks and lose in court because of its preference to be seen as 'fighters' in a war against cryptocurrencies rather than accused of giving up.”
The lawyer added that, so far, the SEC appears to be making little effort to work out the details necessary for the approval and listing of ether ETFs .
“To be clear, I'm not saying there's no chance of an Ethereum spot ETF being approved this year. I'm just saying that the general sentiment in this early bull market is overestimating the chances of approval given all the political and strategic factors weighing against it."
Jake Chervinsky, attorney.
According to the specialist, the good news is that we will probably receive more signals about which direction the SEC is leaning on Ethereum ETFs in the coming weeks .
He recalled that this heralded the approval of BTC, accelerating the regulatory process in the days prior to its review deadline. “If we don't start seeing those signs and hearing those reports as the May 23 deadline approaches, that silence will speak volumes,” she concluded.
ETF analyst Eric Balchunas agreed with Chervinsky's view, noting that he is also an approval bear. Additionally, he said that if approved, these assets will be much smaller in terms of assets versus bitcoin.
These comments join those of other specialists who have also warned that the SEC could reject the launch soon, such as Steven McClurg, Valkyrie's investment director. According to him, due to the differences between ETH and BTC, it could take 1 or 2 years for the SEC to approve these ETFs, as reported by CriptoNoticias.
ETH has not yet passed its 2024 BTC high
Amid expectations of disapproval of Ethereum ETFs, the price of the cryptocurrency fell in one week from $4,000 (USD), its highest in just over two years, to levels from a fortnight ago. It is trading at around USD 3,500.
Although this reflects weakness in demand in its market, the situation is more acute if its price is calculated in bitcoin. ETH is trading in the 0.05200 BTC area, its lowest level in five weeks since mid-February. Ether has not yet passed the maximum price it recorded in bitcoin this year. This has been 0.06100 BTC in January.
Unlike this, the price of bitcoin registered new historical highs in the last two weeks, which contrasts with the bad news shown by discounting the ether market.
