Ethereum spot exchange-traded funds, or ETFs, are facing a rough month.

Final decisions are due on the first generation of ETF applications in late May and are widely expected to be denied. Meanwhile, crypto investment giant Grayscale Investments surprisingly withdrew its Ethereum futures ETF application this week.

The pending decisions follow months of delays from the Securities and Exchange Commission (SEC), the regulatory authority that governs ETFs, which are a bundle of assets that trade on exchanges.

Next Generation?

“I don’t think [an approval is] happening — I definitely don’t think it’s happening in May,” said James Seyffart, an ETF analyst with Bloomberg who accurately predicted that the SEC would approve multiple spot bitcoin ETFs on Jan. 10.

The SEC has not generally been fond of cryptocurrency-based ETFs. It took over 10 years before the Commission finally approved the first spot bitcoin ETFs. 

These delays in approval for spot market investments are in contrast to futures-based ETFs, which already exist for both bitcoin and ether. The SEC’s logic has been that the underlying spot markets — cryptocurrency exchanges — are not actively regulated. Meanwhile futures markets such as Chicago’s CME, which is the largest venue for bitcoin futures contracts in the US, are regulated by the Commodity Futures Trading Commission.

Read more: There Are Now 11 Spot Bitcoin ETFs. Here’s the One That’s Best for You

The SEC is the obstacle to any future crypto ETF offerings. And analysts see little sign that any of these new contenders are going to get a green light anytime soon.

Lawsuit Confusion

As far as the bitcoin spot ETF approval, more important than the arguments or appeals made in any of the applications may have been a lawsuit from Grayscale, one of the applicants, which ran the massive Grayscale Bitcoin Trust that they spent years trying to turn into an ETF.

Grayscale won, with the judge backing their argument that the SEC’s stonewall was a violation of the Administrative Procedures Act. The SEC subsequently approved not just their ETF, but an entire raft of newcomers, including Fidelity and BlackRock, with SEC Chairman Gary Gensler writing in no uncertain terms that his hand had been forced.

But following that expensive lawsuit, Grayscale lost a huge proportion of its market share to competitors who were charging significantly lower annual fees.

The recent withdrawal by Grayscale of its application for an ether futures ETF is therefore a blow to the entire field of applicants.

Read more: Hong Kong Doesn’t Define Ether as a Security, Says Issuer as Spot Crypto ETFs Go Live

Michael Sonnenshein, Grayscale’s CEO, spoke at an event in London on Wednesday and said that the withdrawal was part of a renewed focus on spot products, which indeed, is a  far larger market than futures ETFs.

Another ETF analyst with Bloomberg, Eric Balchunas, said he looked at the move as Grayscale “taking their ball and going home” this time around.

“Honestly if I were them, I don’t know if I would foot that bill, either,” said Seyffart, referring to the legal costs of fighting the SEC. “We can thank Grayscale and almost Grayscale alone for the fact that the SEC approved a bitcoin spot ETF, and then the biggest beneficiaries were BlackRock and Fidelity.”

Read more: Should You Sell Ether Ahead of the SEC’s Expected Rejection of a Spot Ether ETF on May 23?

None of the other contenders for a spot Ether ETF seems to have the same willpower to fight the SEC.

“Everybody else has a bunch of ETFs and they [worked] with the SEC for years and they don’t want to upset them. Grayscale was kind of coming in as an outsider and didn’t have that. They just had less to lose,” said Balchunas.

The Election Variable

Barring a lawsuit from another well-funded entity, the analysts see no change between now and the election in November, particularly as the SEC wouldn’t need to answer a new round of applications by then. 

“If Gensler’s out and all of a sudden there’s a Republican commissioner, that can only be positive for an ETH ETF being approved,” said Seyffart. “Even if Biden does win, my view is that Gensler is gone within another year.”

“I think we could have one or two scenarios. I don’t think lawsuit is one of them in the short term,” said Balchunas. “I think [the SEC] denies. We see why. And then we wait for the election.” 

“If the [Republicans] win, they just immediately throw in some filings and just see if the new administration will approve them,” Balchunas continued “And then if it’s the same administration, then they decide what to do from there. Maybe they put in a new batch of filings and they try to correct what the denial was. But in either of those cases, you’re looking at a year [before approvals].”

CORRECTION (May 9, 8:23 p.m. ET): A previous version of this story referred to Grayscale withdrawing its application for a spot ether ETF, rather than an ether futures ETF. We regret the error.