The U.S. election is crucial, and it is not until the end of 2025 that a spot Ethereum ETF will emerge!

According to a report by DLNews, the U.S. Securities and Exchange Commission (SEC) may reject the application for an Ethereum spot ETF on May 23. Bloomberg ETF analyst Eric Balchunas stated that this suggests an Ethereum spot ETF may not appear until the end of 2025, with the U.S. election playing a crucial role in the timeline.

SEC to Deny Ethereum Spot ETF Application on 5/23

Balchunas stated that due to the lack of meaningful interaction with potential issuers, along with the unclear regulatory status of Ethereum, he is pessimistic about the chances of an Ethereum spot ETF passing by the end of May, not to mention the recent investigation by the SEC into the Ethereum Foundation.

If the SEC rejects the application for an Ethereum spot ETF on May 23, it implies that a spot Ethereum ETF may not emerge until the end of 2025. Faced with rejection, these ETF issuers have only two options─

sue the SEC like Grayscale, or wait until after the U.S. election!

Issuers Won't Choose to Sue the SEC This Time

Before Grayscale filed a lawsuit against regulatory agencies in 2022, it took the SEC several years to reject Bitcoin spot ETF applications. In September last year, a judge deemed the SEC's denial of the application "arbitrary and capricious." Four months later, the Bitcoin ETF was officially approved.

However, Balchunas believes that an Ethereum spot ETF is unlikely to replicate this strategy, as litigation costs are too high and time-consuming. Other issuers do not want to anger the SEC, and Grayscale's uniqueness lies in not being a major ETF issuer. But other companies are, so no one will step up this time.

November's U.S. Election as a Turning Point?

Moreover, if the U.S. presidential election in November could solve the problem, why sue the SEC?

Currently, Trump is leading in some polls, increasing the likelihood of appointing a new SEC chairman.

Balchunas said:

Trump may not necessarily support cryptocurrencies, and his predecessor SEC chairman, Jay Clayton, also did not approve spot ETFs. But he might still be more suitable for cryptocurrencies and spot ETFs.

Trump's campaign message: If you support cryptocurrencies, it's best to vote for Trump.

Ethereum Spot ETF Likely to Appear by the End of 2025

Assuming a new chairman is appointed in April or May, and issuers subsequently submit documents, the deadline for approval or rejection could fall around December 2025. Balchunas speculates:

Issuers will get through this summer first, lick their wounds, feel discouraged, and then see what happens with the election!