Bloomberg: Likelihood of Ethereum Spot ETF Approval in May Drops to 35%
Bloomberg analysts have reduced their prediction of the likelihood of an Ethereum spot ETF approval in May to just 35%.
Amid a heated cryptocurrency market fueled by inflows into Bitcoin spot ETFs, the community is increasingly hopeful for SEC approval of an Ethereum spot ETF by May.
However, as the deadline approaches, there are no signs indicating that the Securities and Exchange Commission (SEC) will give the green light. SEC Chairman Gary Gensler has remained ambiguous regarding the approval prospects in recent interviews.
Chairman Gensler has maintained a stance unsupportive of cryptocurrencies, noting that only Bitcoin has been deemed a commodity suitable for a spot ETF. He argued that Ethereum, since transitioning to a Proof-of-Stake mechanism, possesses characteristics akin to securities. SEC has listed 52 tokens as securities amidst a slew of lawsuits in 2023.
52 tokens declared securities by the SEC
Following the postponement of proposals by BlackRock and Fidelity in early March, the SEC requested public feedback on whether Ethereum's Proof-of-Stake increases concerns about vulnerability to fraud and manipulation.
Yeah our odds of eth ETF approval by May deadline are down to 35%. I get all the reasons they SHOULD approve it (and we personally believe they should) but all the signs/sources that were making us bullish 2.5mo out for btc spot are not there this time. Note: 35% isn't 0%, still… https://t.co/QWQOGZjDC5
— Eric Balchunas (@EricBalchunas) March 11, 2024
With uncertainties lingering, SEC faces challenges in granting approval.
In light of these factors, Bloomberg's senior analyst Eric Balchunas predicts:
"We're betting a 35% chance it gets approved.
But note, that's 35% not 0%. Long-term, we still believe this product will get through."
Earlier in January, this analyst had forecasted a 70% chance of an Ethereum spot ETF approval by May, while colleague James Seyffart estimated 60-65%.
However, the probability has now dwindled to 35%.
This #Ethereum ETF cycle feels like the opposite of #Bitcoin ETF approval odds at the moment. The more we see/hear (and don't see/hear) the less optimistic I become.
— James Seyffart (@JSeyff) March 11, 2024
We're ~73 days from the deadline and there really seems to be little to no movement https://t.co/N6OpM870XF
James Seyffart explained on X:
"This time around, the Ethereum spot ETF feels opposite to the Bitcoin ETF approval. We have about 73 days until the deadline, and it seems there's very little to no chance."
Variant Fund's Legal Director Jake Chervinsky was more direct:
"To be clear, I'm not saying there isn't a chance the ETH spot ETF gets approved this year. I'm saying the market's overall sentiment currently overestimates the approval likelihood.
The good news is we may get more signals on SEC's direction in the coming weeks.
SEC has previously signaled approval intent for Bitcoin spot ETFs ahead of the January deadline.
If we don't start seeing those signs and hearing those reports about Ethereum spot as the May 23 deadline approaches, it means the approval likelihood is very low."
ETH is currently fluctuating around $4040, about 17% below its ATH of $4868 recorded in November 2021.
1H chart of ETH/USDT pair on Binance at 12:00 PM on 12/03/2024
