Market Buzz: Fidelity Delays Ether ETF Decision Amidst Surging Interest in High-Stakes Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has extended the deliberation period for Fidelity's Ether (ETH) exchange-traded fund (ETF) bid, citing the need for more time to consider the proposed rule change and associated issues. The decision is now scheduled for March 5, following a 45-day delay.

SEC's Deadline Extension

The SEC, on January 18, announced the extension, prompting Bloomberg ETF analyst James Seyffart to express his expectation of the delay, emphasizing that the crucial dates to watch are in late May. This aligns with the SEC's final deadline on May 23 for either approving or denying VanEck's Ether ETF.

Influx of Leveraged Bitcoin ETFs

Simultaneously, the SEC faces a surge in filings for leveraged Bitcoin (BTC) ETFs. Direxion submitted applications for five Bitcoin ETFs on January 18, joining ProShares and REX Shares, who had filed for five and six leveraged Bitcoin-tracking ETFs earlier in the month, respectively.

Direxion's filing outlines plans for 1x, 1.5x, and 2x long leveraged Bitcoin funds, along with corresponding short leveraged funds. Bloomberg ETF analyst Eric Balchunas notes the possibility of leveraged Bitcoin ETFs outnumbering long-only ETFs, a phenomenon not witnessed before.

Divergent Opinions on Ether ETF Approval

Market opinions on the likelihood of SEC approval for spot Ether ETFs are divided. While Balchunas estimates a 70% chance of approval by May, basing it on the SEC's deadline for VanEck's fund, Mark Yusko, the CEO of Morgan Creek Capital, believes the SEC maintains a hostile stance towards crypto. Yusko suggests the regulator might classify Ether as a security, in contrast to Bitcoin, which SEC chair Gary Gensler has previously categorized as a commodity.