As the crypto community awaits the spot Ethereum ETF verdict this week, Bloomberg’s Senior ETF Analysts, Eric Balchunas, and James Seyffart, are optimistic about its approval.
Ethereum ETF: Crypto enthusiasts are hopeful
There are differing opinions regarding the potential approval of spot ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).
Despite the uncertainty, Balchunas shared in an X post that he and his colleague Seyffart have raised their chances of approval from 25% to 75%. This optimism is similar to the excitement around the approval of a spot Bitcoin ETF in January.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they’d be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
Balchunas’s statement stemmed from Nate Geraci’s post, the co-founder of the ETF Institute, which highlighted the United States Exchange Commission’s (SEC) decision for spot Ethereum ETFs.
Geraci stated that the SEC must approve both the 19b-4s and S-1s for the ETFs to be launched.
Traders and analysts on social media think the SEC might approve the product as echoed by Chris Newhouse from Cumberland Labs. Now traders are rushing to take positions, even though they had previously dismissed the possibility of approval.
In contrast, certain fund managers anticipate a rejection since their private discussions with the SEC have not been as extensive as they were before the approval of spot Bitcoin ETFs in January.
Seyffart recently highlighted that the chances of the SEC rejecting Ethereum ETFs due to a significant rise based on an SEC release dated March 4, 2024.
Market’s response to the news
The crypto market is in a frenzy as Ethereum ETF approval chance surges, propelling ETH price to $3,436.91 up by 11.87% surge. Bitcoin (BTC) joins the rally, surpassing $70,000, while altcoins follow suit, signaling market revival.
Coinbase thinks it is unlikely that spot Ethereum ETFs with staking rewards will be approved soon because of the unclear regulatory guidance.
Interestingly, Ark Invest removed the staking component from its Ethereum ETF application. On another note, Polymarket, a decentralized prediction market platform on Ethereum, currently predicts a 16% chance of approval in May.
Additionally, the Grayscale Ethereum Trust (ETHE) is trading at a 24% discount compared to its net asset value.
Despite some skeptics, both Seyffart and Fox Business Journalist Eleanor Terrett have confirmed the shift in trend, which validates the likelihood of approval of spot Ethereum ETF.
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