Analysts have raised their odds on the approval of a spot Ethereum ETF. This shift in sentiment comes amid renewed optimism about receiving the approval from the U.S. Securities and Exchange Commission (SEC).
Related: Unexpected Grayscale’s Ethereum ETF Withdrawal
This turn of events is particularly amusing, given that Seyffart and Balchunas had been lowering their odds in recent months. Moreover, industry giants, including Jan van Eck, CEO of VanEck, had openly expressed their pessimism that the Ethereum ETF would receive approval.
Pessimism Surrounding Ethereum ETF Approval
During an interview with CNBC at Paris Blockchain Week, Jan van Eck shared that his company, along with Cathy Wood of Ark Invest, was among the first to file for an Ethereum ETF in the U.S. He also mentioned that both of their applications are likely to be rejected in May.
“The review process involves regulators providing feedback on your application, and this was happening a few weeks before the Bitcoin ETF came out — and right now, when it comes to Ethereum, pins are dropping as far as Ethereum is concerned,” Van Eck explained.
And he wasn’t alone in his pessimism. Industry analysts James Seyffart and Eric Balchunas from Bloomberg Intelligence echoed this sentiment. Balchunas himself slashed his approval odds from 70% down to a mere 35%.
The SEC’s stance on Ethereum remains a hot topic of debate. BlackRock CEO Larry Fink believes the SEC might approve an Ethereum ETF, even if they view ETH as a security, unlike Bitcoin.
Renewed Optimism
Eric Balchunas and James Seyffart, well-known ETF analysts, recently announced that they are upping their odds of approval for an Ethereum spot ETF from 25% to 75%. Balchunas explained the reason behind the resurgence in optimism.
“Today I overheard chatter about the SEC possibly doing a 180 on this increasingly political issue, so now everyone’s in a tizzy. But again, we’re cat-limiting it at 75% until we see more, like filing updates,” Balchunas tweeted.
After this news broke, the price of ETH surged by 19.98% over the last 24 hours. At the time of writing, ETH is trading at $3676.
It’s reported that the SEC has requested asset managers looking to list Ethereum spot ETFs to update their 19b-4 documents by the deadline this week. This move has sparked speculation and activity in the industry, as stakeholders anticipate potential approval.
Balchunas also referenced a statement from Nate Geraci of the ETF Store. He predicted, “SEC will approve the 19b-4, then slowly play the S-1 game.”
The 19b-4 documents propose rule changes necessary for listing new products like Bitcoin or Ethereum spot ETFs on stock exchanges. Meanwhile, S-1 registration forms provide detailed information about new securities being offered to the public, including fund structure, management, and investment strategy. It’s important to note that for an ETF to officially launch on the market, issuers must receive approval for both forms.
However, Seyffart noted that their increased odds are only calculated for the “May 23 deadline 19b-4,” referring to the approval of VanEck’s Ethereum spot ETF.
It could be weeks or months before we see S-1 approval and thus an active Ethereum ETF.
Seyffart
More on ETFs:
- What Does Spot Bitcoin ETF Mean for Investors?
- Bitcoin Critically Fell After the ETF Approval. What’s Next?
Initially met with skepticism and even pessimism from industry insiders, the tide seems to be shifting towards optimism. Analysts have significantly raised their odds of approval, citing potential regulatory shifts and speculation within the industry. While the SEC’s stance remains a subject of debate, the recent developments indicate a potentially brighter outlook for the future of Ethereum ETFs.
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