- The recent developments have significantly increased the likelihood of the SEC approving an Ethereum ETF.
- Market analysts and insiders are optimistic about the potential approval, citing various indicators and insider information.
- Bloomberg ETF analyst Eric Balchunas has raised the approval probability to 75%, reflecting a major shift in sentiment.
Discover the latest insights on the potential approval of the Ethereum ETF by the SEC, with expert analysis and market reactions.
SEC’s Ethereum ETF Approval Probability Rises to 75%
As reported by CoinOtag, the prospects for a spot Ethereum ETF approval have dramatically improved. Bloomberg ETF analyst Eric Balchunas highlighted a significant shift on May 20th, noting that the SEC’s stance might be reconsidered. Following these rumors, Balchunas increased the approval probability from 25% to 75%. He believes that Ethereum ETFs, particularly the VanEck Ethereum ETF application, have a strong chance of receiving at least partial approval by the final decision date on Thursday.
Balchunas suggests that the SEC is likely to approve the 19b-4 applications, allowing ETH ETFs to be listed on exchanges. This move would initiate the process while giving the SEC ample time to thoroughly review each application before making a final decision. Despite the increased confidence, S-1 approval and detailed registration documents are still required for each ETF issuer.
Sources Indicate High Likelihood of Ethereum ETF Approval
Balchunas is a well-respected insider with reliable information, but his perspective is not the only one reflecting optimism. Other analysts and market participants are also considering the possibility of an Ethereum ETF approval this week. FOX reporter Eleanor Terrett reported that discussions between SEC staff and issuers have commenced. She noted that there are still “tasks to be done” on the S-1 applications. In her latest update, Terrett predicted that the SEC might approve the 19b-4s tomorrow, followed by collaborative work on the S-1s over the next few weeks or months.
I defer to the ETF experts on this, but this seems to suggest that maybe the SEC approves the 19b-4s tomorrow and then works with issuers on S-1s over the next few weeks/months?
Increased Activity in Polymarket ETF Bets
Polymarket, a platform allowing users to bet on event outcomes using cryptocurrency, saw significant activity following Balchunas’s announcement. Before his announcement, the site priced the probability of an ETF approval by May 31st at 10%. However, within hours, the odds surged to approximately 75%, and at the time of writing, they hover around 70%. This implies that bettors could achieve around a 50% return if the ETF is approved. Conversely, betting against the approval could yield over 200% returns.
Polymarket hosts various events for betting, including political outcomes and social media predictions. The Ethereum ETF bet specifically states that any spot Ethereum ETF approved by the SEC by May 31, 2024, will result in a ‘Yes’ outcome. This language has sparked some debate, as the approvals might be simpler. Nevertheless, the bet provides insights into how market participants view the likelihood of an ETF approval by the weekend.
A Critical Point for Ethereum: The Security Issue
Regulators are also examining whether Ethereum should be classified as a security following its transition to a Proof-of-Stake consensus. This classification could significantly impact the ETF approval process. Approving spot Ethereum ETFs might indicate that the SEC no longer views Ethereum as a security.
Balchunas’s optimism is based on the belief that the SEC might be willing to proceed with ETF approvals while continuing to evaluate the necessary documents. However, as Terrett pointed out, procedural steps and regulatory considerations still need to be addressed.
Conclusion
The potential approval of an Ethereum ETF by the SEC has garnered significant attention and optimism from market analysts and participants. With the approval probability now at 75%, the coming days will be crucial in determining the outcome. Whether the SEC will approve the 19b-4 applications and collaborate on the S-1s remains to be seen, but the market’s anticipation is palpable. Investors and stakeholders should stay tuned for further developments, as the approval could have substantial implications for the cryptocurrency market.
