Fidelity has advanced its efforts to roll out a Spot Ethereum Exchange-Traded Fund [ETF] by submitting a revised S-1 application to the United States Securities and Exchange Commission [SEC]. This amendment arrives at a critical moment, with rising anticipation that a decision on Ether ETFs could be made as soon as May 23.
In its updated application, Fidelity specifies that the proposed ETF’s underlying Ether tokens will not be staked. This decision is intended to address security and regulatory issues linked to staking activities. While staking can enhance network security and generate yields, it also brings up concerns regarding asset custody and the regulatory framework. By omitting staking, Fidelity seeks to alleviate these concerns and better align its ETF with regulatory standards.
The S-1 filing is a mandatory document required by the SEC for launching publicly traded securities in the U.S. It ensures transparency and compliance with federal regulations by providing a comprehensive overview of the security and the entity offering it.
Also Read: SEC Asks Exchanges To Update 19B-4 filings For Spot Ethereum ETFs
SEC’s Shifting Stance on Ether ETFs
Fidelity’s amendment comes amid reports of the SEC’s evolving stance on spot Ethereum ETFs. Political pressures and changing regulatory considerations have prompted the SEC to ask ETF issuers to update their 19b-4 filings. This signals a potentially more favourable view toward these financial products.
Furthermore, senior Bloomberg ETF analyst Eric Balchunas has increased the approval odds. For the 19b-4 filings, he has pushed it from 25% to 75%. However, he notes that even if these filings are approved, trading cannot commence until S-1 filings are also approved. Additionally, ETF analyst James Seyffart indicated that while S-1 approvals could take weeks or months, their eventual approval seems likely if the 19b-4 filings are accepted.
How is Fidelity’s BTC ETF faring?
Fidelity’s amendment and the potential approval of Ethereum ETFs could significantly impact the market. The ETF market has already shown positive activity. The U.S. spot Bitcoin ETF market recently recorded a total daily net inflow of $302.97 million, the highest since May 3. Fidelity’s FBTC led these inflows with $131 million.
Approving Ether ETFs could further enhance market dynamics. This is because it would offer investors more regulated avenues to gain exposure to Ethereum.
Also Read: Ethereum (ETH) Forecasted To Hit $10,000: Here’s When