VanEck CEO Predicts Low Probability of Spot Ethereum ETF Approval in May 2024 Amid SEC Silence
In an interview that has dampened the spirits of many in the cryptocurrency investment sector, Jan van Eck, CEO of investment firm VanEck, has shared a pessimistic forecast regarding the approval of spot Ethereum ETFs by May 2024. Despite the growing anticipation within the crypto community, van Eck's outlook provides a stark reality check against the backdrop of regulatory hesitations by the U.S. Securities and Exchange Commission (SEC).
Van Eck's skepticism is rooted in the regulatory body's lack of response to applications from potential issuers, including his own firm. VanEck, in collaboration with Ark Invest, was among the first to file for a spot Ethereum ETF. The final decision on their applications is expected to be made on May 23 and 24, respectively. This timeline, however, is shadowed by the SEC's apparent silence, which significantly differs from the process observed with Bitcoin ETFs where the regulators would typically engage applicants with feedback.
The CEO's comments during his CNBC interview were echoed in discussions with CoinDesk journalists, where he highlighted that even after filling out form S-1 and submitting an updated application in February 2024, VanEck received no comments from the SEC. This situation led Bloomberg analysts to lower the probability of an Ethereum ETF approval in May to a mere 30%, citing the regulator's silence as a negative indicator for the investment product's launch prospects.
Beyond the immediate concerns with regulatory approvals, van Eck emphasized a broader issue facing the crypto industry: the high cost of transactions. He criticized the impracticality of transaction fees on networks like Bitcoin and Ethereum, which he believes deter their use for application development and other purposes. "Would you like to fuel your car for $50 and then pay $600? That's the kind of transaction fees we're seeing on the Ethereum network," van Eck remarked, highlighting the urgency for cost-effective alternatives.
To counteract these high transaction costs, van Eck suggested turning to Solana's network or Layer 2 (L2) solutions, which not only reduce expenses but are also more suitable for developing genuinely useful applications. This recommendation aligns with previous forecasts by VanEck experts, who predicted that the market capitalization of L2 solutions on the Ethereum network could reach $1 trillion by 2030.
The ongoing narrative around the approval of spot Ethereum ETFs underscores a critical juncture for the crypto industry, where regulatory challenges and the need for innovation intersect. As the May decision dates loom, stakeholders across the sector are closely watching how these developments will shape the future of cryptocurrency investments and the broader adoption of blockchain technology.