• US SEC seeks comments on ETH ETF applications for Grayscale, Bitwise and Bitwise. 
• Analyst maintains low odds of May approval, calls the comments “standard procedure.”

On the 3rd of April 2024, the U.S. Securities and Exchange Commission (SEC) opened a public comments period for Ethereum [ETH] ETF filing amendments tied to Bitwise, Fidelity and Grayscale. 

The public comment period will run for 21 days. This development has excited some crypto users, who term the development a “giga bullish” scenario for ETH. 

Unfortunately, one of the industry analysts has poured cold water on it. James Seyffart, a Bloomberg ETF analyst, called the public comment window “standard procedure.” 

“Asking for public comments on a 19b-4 is standard procedure. Every single 19b-4 ETF filing goes through the same process (whether approved or denied). It’s not “bullish” in any capacity for Ethereum ETFs.”

ETH ETF: May approval dilemma

Asked whether BlackRock will be able to pull approval for its spot in Ethereum ETF, Seyffart said,

“Good question. I’d assume they wouldn’t withdraw, but I wouldn’t put it past Larry to pull a rabbit out of a hat, either. Haha. We are low odds—but not zero for a reason.”

That’s an outright dilemma for May approval.  

However, Sam Enzer, partner at Cahill Gordon and Reindel, claims that the SEC could reject approval in May due to the risk of market manipulation.

“I think the SEC, at least in the first instance, will deny or reject the applications. I think they’ll rely on similar arguments that there is a risk of market manipulation, that they need more surveillance.” 

Additionally, Enzer highlighted that ETH staking could be one of the biggest concerns for the SEC. 

Amidst the May approval dilemma, ETH has slumped 9% on weekly charts, dropping from $3645 to $3200, partly because of Bitcoin’s [BTC] massive drawdown. 

Should the bearish overhangs from the current unfavorable macro front persist, ETH bears could extend the drop to a $3000 psychological level.