On April 26, Franklin Templeton’s Ethereum Spot ETF was listed on DTCC as a starting step in the trading process. However, this preliminary step does not guarantee the SEC approval of Ether Spot ETF.
Franklin Templeton’s proposed spot Ethereum ETF with the ticker EZET has appeared on the Depository Trust and Clearing Corporation’s (DTCC) new securities list. This listing occurred just a day following the SEC’s probable rejection of spot ETH ETF applications.
Listing of Ethereum ETFs
The listing at DTCC represents the primary step in the ETH ETF trading process. However, this listing fails to ensure that the Securities and Exchange Commission (SEC) will approve the Ethereum Spot Exchange Traded Funds (ETFs).
The SEC’s decision on the approval of Ether spot ETFs remains pending until now.
Journey of EZET
In February 2024, Franklin Templeton filed for spot Ethereum exchange-traded funds after the SEC approved spot BTC ETFs. Other applicants involving industry giants such as BlackRock, Grayscale, VanEck, and ARK Invest await SEC approval for Ether ETFs.
The listing news became big as investors considered it a hint that Franklin was ready to jump into the Ethereum spot ETF market. Polygon and Stellar blockchains have facilitated the tokenization of a $380 Million Treasury fund for Franklin Templeton, creating BENJI tokens. Each BENJI token is comparable to the share of the FOBXX fund that can be traded on both blockchains mentioned above.
Pending decision on Ether ETF Approval
Although the market outlook for Ether ETFs is less promising and considered positive than it was for Bitcoin ETFs before the final approval on January 11, 2024.
Eric Balchunas, a popular Bloomberg ETF analyst, estimates that there is only a 25% probability of the SEC issuing approval for a spot Ethereum ETF. The probable reason for his expectation of disapproval is the noticeable absence of engagement from the SEC, which contrasts with the Bitcoin ETF approval process. Balchunas interprets SEC’s silence as a deliberate ‘tactical’ decision to avoid approval rather than mere procrastination.
Some analysts also recommend only a 20% chance of ETH ETF approval. Again, the reason for the lower probability is stated to be the legal nature of the ETH coin in the perception of the SEC.
Observing the ongoing, intense conflict between the SEC and Ethereum is essential, as the SEC investigates non-profit ETH foundations to find evidence against Ethereum.
ConsenSys, a popular blockchain firm, has also filed a lawsuit against the SEC to defend the SEC’s claim against Ethereum.
Analysts from JPMorgan anticipate an extended delay in the regulatory approval of the spot Ethereum ETF as they believe that the approval could eventually follow a legal challenge similar to that of Grayscale’s lawsuit, which compelled the SEC to reassess the decision on spot Ethereum ETF applications.
All this while, Ethereum’s market performance has been significantly flattened after the recent and fourth bitcoin halving, as Ethereum is trading between $3,100 and $3,200, as per the data from CoinGecko. Currently, Ethereum is trading around $3,111, 0.38% down from the previous trading day.
