Jake Chervinsky, Chief Legal Officer of cryptocurrency company Variant, expressed skepticism about the approval of an Ethereum (ETH) spot ETF this year.
Chervinsky's comments come during a period of extremely active cryptocurrency markets, which he believes the Ethereum ETF will further stimulate.
Chervinsky noted the political backlash he faced after the U.S. Securities and Exchange Commission (SEC) approved Bitcoin (BTC) ETFs. He noted that the approval was essentially forced by the court and sparked significant controversy.
While the current market is largely driven by “a hype,” Chervinsky believes the launch of an ETH ETF could further fuel this trend. This term refers to the human emotions that influence financial markets and often lead to periods of intense buying or selling.
According to Chervinsky, the SEC has a legal argument that could potentially justify rejecting an ETH ETF, even if it is false. Chervinsky noted that the SEC has demonstrated a willingness to support controversial legal positions in court to achieve political goals.
Despite Blackrock's nearly flawless record in getting ETFs approved, Chervinsky suggested that this success was as much a result of a collaborative relationship with the SEC as it was of its ability to apply pressure. The analyst predicts that if the SEC asks Blackrock and other ETH ETF sponsors to withdraw their applications, which is common practice, they will likely comply.
Despite his reservations about the timeline, Chervinsky noted that approval of an ETH ETF is more of a question of “when, not if.”
*This is not investment advice.