What are the current chances of Ethereum ETF approval as SEC delays decision?
Story Highlights
The U.S. Securities and Exchange Commission (SEC) is unlikely to approve a spot Ethereum ETF, with the odds dropping to 35% from earlier predictions of 70%. Factors contributing to this decline include a lack of progress, political pressure, and the SEC’s cautious approach. The fate of the Ethereum ETF remains uncertain.
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Changing Sentiment
The outlook for a spot Ethereum ETF has taken a surprising turn, as Bloomberg Senior ETF Analyst Eric Balchunas has reduced the odds to 35%. This significant decline raises questions about potential challenges beyond market dynamics and dampens initial optimism.
Yeah our chances of eth ETF approval by May deadline are now 35%. Although we understand the reasons why it should be approved (and personally believe it should), the signs and sources that made us bullish about btc spot 2.5 months ago are not present this time. Note: 35% is not 0%, still…
https://t.co/QWQOGZjDC5
— Eric Balchunas (@EricBalchunas)
March 11, 2024
Fellow analyst James Seyffart, who initially had a positive outlook at 60-65%, now expresses diminishing hope, drawing parallels with the changing sentiment around Bitcoin ETF approval odds.
This Ethereum ETF cycle feels like the opposite of the Bitcoin ETF approval odds at the moment. The more we see and hear (or don’t see and hear), the less optimistic I become.
We’re approximately 73 days away from the deadline, and there appears to be little to no movement.
https://t.co/N6OpM870XF
— James Seyffart (@JSeyff)
March 11, 2024
Also Read:
SEC Delays BlackRock’s Ethereum ETF for Deeper Dive into Legal and Policy Issues
Alarm Bells are Ringing!
Investment experts caution that the lack of changes in recent Ethereum ETF applications mirrors patterns observed in past Bitcoin ETF approvals. Negative indicators, such as a shortage of market makers and SEC statements, raise concerns about the regulatory stance.
GSR, a crypto market-making firm, is even considering reducing the odds of approval if there are no positive changes in the coming weeks.
Political Pressure
Political pressures from figures like Senator Elizabeth Warren contribute to the SEC’s cautious approach. Regulatory obstacles and a deliberate pace make the SEC a conservative body reluctant to approve Ethereum ETFs.
The delayed decisions of banking giants BlackRock and Fidelity also add to the uncertainty, as noted by analysts like Jake Chervinsky, Variant’s Chief Legal Officer.
Deadlines Loom
The SEC’s cautious stance may be influenced by political opposition and a strategic approach to learning from past mistakes in approving cryptocurrency ETFs. Balancing innovation and market stability appears to be the SEC’s goal.
With the May 23 deadline fast approaching, the initial excitement surrounding Ethereum ETF approval has turned into uncertainty. Political resistance, market volatility, and regulatory caution create a complex situation, leaving market participants and enthusiasts eagerly awaiting the outcome.
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All the answers will be revealed in the coming weeks. We can’t wait – can you?
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Ethereum