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Gensler Hesitates on Ethereum ETFs, Cites Court Loss as Reason for Bitcoin ETF Approval

Securities and Exchange Commission (SEC) Chair Gary Gensler has remained cautious regarding the topic of spot Ethereum (ETH) exchange-traded funds (ETFs).

When asked about the possibility of a decision and the timeline for approval, Gensler mentioned that the process would follow a similar approach as that of Bitcoin (BTC) ETFs. However, he refrained from providing specific details or a potential timeframe.

On February 6, the SEC postponed its decision on the Invesco Galaxy Ethereum ETF, marking a continuation of the delay initially experienced in December regarding Invesco’s ETF application.

Additionally, the SEC has deferred decisions on other Ethereum ETF applications, including those from prominent firms such as Grayscale, Fidelity, and BlackRock, which is the largest asset management company globally.

It’s worth noting that other firms, including VanEck and Hashdex, are also in pursuit of Ethereum ETF approvals, while Franklin Templeton has recently joined the ranks by filing a spot Ethereum ETF application.

Gensler Maintains Stance on Bitcoin Despite Approving Spot ETFs

During the interview, Gensler also exercised caution when discussing his agency’s approval of Bitcoin ETFs.

He emphasized that the approval did not signify a shift in the SEC’s perspective on the risks linked with Bitcoin. Instead, it was a response to a court decision in the Grayscale v. SEC case.

The court’s ruling highlighted that the SEC had “failed to reasonably explain” why it had previously greenlit Bitcoin futures products but not spot ETFs. Gensler elaborated on this, stating:

“While we had denied two dozen of these, a court in Washington said we did not get that right, and it got remanded to us. The most sustainable thing to do is to approve these given the court ruling.”

However, Gensler voiced concerns regarding Bitcoin’s association with illicit activities and the insufficient oversight faced by many crypto exchanges.

During the interview, Gensler underscored the rampant fraud and manipulation prevalent in the crypto industry, as well as the numerous bankruptcies that have transpired.

In contrast, he acknowledged the role of government-issued currencies, noting their potential for illegal use while emphasizing their crucial support for established economies.

Gensler reiterated the SEC’s stance of remaining impartial and “merit neutral,” stressing that as long as entities adhere to the law, the SEC will treat them accordingly.

Despite Ethereum ETF Uncertainty, ETH Staking Sees Renewed Interest

The Ethereum network is witnessing a surge in the number of validators eager to stake their ETH.

As reported, the validator entry queue presently sits at 7,045, totaling over 225,000 Ether (equivalent to $562 million), marking its highest level since October 2023.

It is projected that the backlog will be cleared in slightly over 48 hours.

Due to Ethereum’s constraints on the number of new validators that can join the network per epoch, a backlog arises as more entities seek to participate.

An Ethereum epoch lasts approximately 6.4 minutes.

Validators are entities that stake a minimum of 32 Ether in the network, allowing them to engage in running Ethereum’s proof-of-stake consensus blockchain.

In exchange for staking their Ether, validators receive a consistent rate of return akin to interest income from fixed-income instruments like bonds.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

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