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Bernstein Analysts Dismiss Political Pressure as Reason for SEC’s Ether ETF Approval


Analysts at research and brokerage company Bernstein claim that the United States securities regulator’s approval of the spot Ether (ETH) exchange-traded funds could not have been a last-minute decision motivated by political pressure.

Analyzing the SEC’s Decision 

Rising political pressure from the Democrats to persuade swing voters in the run-up to the U.S. election in November is one of the main hypotheses behind the Securities and Exchange Commission’s abrupt shift in attitude toward spot ETFs in May.

However, Bernstein analysts Gautam Chhugani and Mahika Sapra found the story to become less convincing after President Joe Biden vetoed the Staff Accounting Bulletin (SAB) No. 121 repeal bill in a June 3 report.

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The analysts stated the SEC knew it was in a corner on the ETH ETF since it featured the same regulatory set-up as the spot Bitcoin ETFs, including the same spot and futures correlation and multiple live Ether futures contracts on the Chicago Mercantile Exchange, which suggested Ether’s commodity status.

“Most likely, the SEC avoided a legal conflict by adopting a more pragmatic approach.” Still, the Bernstein analysts said, “Great outcome for the industry.”

Industry Reactions and Future Projections about Ether

Bernstein said it has spoken with some candidates for spot Ether ETF who were “equally surprised” at the last-minute SEC clearance.

None anticipated an Ethereum ETF approved by the SEC. “We interpreted the SEC personnel’s radio silence leading up to the clearance date as likely rejection. However, we instructed ETF issuers to refile the 19b-4s within 24 hours, 4 days before the approval deadline.”

Though there “should be pent-up demand from the same participants as the Bitcoin ETF,” Bernstein, like other analysts, anticipates the spot Ether ETF flows to be far less than Bitcoin’s.

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In the run-up to the release, the company anticipates Ether to show strong price movement.

Officially authorized by the SEC are 19b-4 applications for spot Ether ETFs from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise on May 23.

Currently awaiting the S-1 registration statements to be signed off by the SEC, the eight authorized Ether ETF issuers might have anywhere between weeks and months.

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