Unraveling the Prospects of SEC’s Approval for Ethereum ETF in 2024
Renowned analyst James Seyffart has sparked excitement in the crypto community with his speculation that there is a 60% chance of the Securities and Exchange Commission (SEC) approving exchange-traded funds (ETFs) for Ethereum (ETH). Standard Chartered Bank suggests that the SEC may follow a similar approach to Spot Bitcoin ETFs, initially rejecting them before approving them by the final deadline of May 24th. Bloomberg analysts also agree that the SEC’s denial and approval game could cause a market downturn.
However, there is positive news regarding the approval of ETH ETFs, as Geoffrey Kendrick has faith in the SEC’s previous stance on Ethereum. In lawsuits against crypto companies, the SEC has not classified Ether as a security. Additionally, Ethereum is a regulated futures contract on the Chicago Mercantile Exchange (CME), which increases the likelihood of approval.
During a recent interview with Scott Melker, Seyffart discussed the SEC’s initial delay and expressed his belief that it will eventually lead to the approval of Ethereum ETFs. He analyzed the strategies that the SEC could employ, such as comparing Proof of Stake (PoS) and Proof of Work (PoW), which could potentially delay the decision. Reports from TD Cowen suggest that there may be a potential delay until 2025 or 2026, aligning with the SEC’s cautious approach in the current US political climate.
Seyffart is less confident about the approval of Ethereum ETFs compared to Bitcoin ETFs, estimating the odds at around 60%. The SEC’s decision will have an impact beyond just Ethereum, affecting the entire crypto market. The approval of Bitcoin ETFs notably influenced the price of Bitcoin, and a similar response is expected for Ethereum once ETFs are approved.
Both Ethereum co-founder Joseph Lubin and BlackRock CEO Larry Fink support the approval of a spot Ethereum ETF by the SEC. Lubin highlights the efficiency of ETFs compared to other financial tools, emphasizing Ethereum’s role in transactions and storage. Fink, following the success of BlackRock’s spot Bitcoin ETF, also supports an Ethereum ETF.
As the May 23rd deadline approaches, the crypto community eagerly awaits the SEC’s decision, which could be a significant milestone for Ethereum and restore investors’ faith in the regulatory body. If approved, Ethereum ETFs could have a significant impact on the price of ETH, similar to the movements seen in Bitcoin before the approval of BTC ETFs. Seyffart suggests that Ethereum’s value could surge, potentially reaching $4,000.
It is worth noting that it is also suggested that ETH may face less selling pressure after ETF approval compared to BTC, as the Grayscale Ethereum Fund holds a smaller market share of Ethereum compared to the Grayscale Bitcoin Fund, with even fewer shares held by the FTX bankruptcy estate.
Tags: Ethereum