By
Godfrey Benjamin
April 26th, 2024
James Seyffart pointed out that the US SEC has not engaged the spot Ether ETF applicants in any way like Bitcoin’s earlier this year.
The odds of spot Ethereum (ETH) exchange-traded funds (ETF) getting approved in the United States by May 23 have dramatically dropped to 35 percent, according to analysts. The unanimous call is based on the fact that the United States Securities and Exchange Commission (SEC) has not engaged the spot Ether ETF applicants in the same manner that the spot Bitcoin ETF applicants received.
The forecast follows Tuesday’s SEC decision to delay ruling on the Hashdex Nasdaq Ethereum ETF fund and the Ark 21Shares Ethereum ETF. While the recent delays were expected, all attention has remained on the May 23 deadline, when the US SEC must issue a ruling on the spot Ether ETF applications.
Some of the other spot Ether ETF applicants include BlackRock Inc (NYSE: BLK), iShares Ethereum Trust, Fidelity Ethereum Fund, and VanEck Ethereum ETF, among others.
My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round. The SEC hasn't engaged with issuers on Ethereum specifics. Exact opposite of #Bitcoin ETFs this fall. https://t.co/TyAzAOrAC5
— James Seyffart (@JSeyff) March 19, 2024
However, the prediction on spot Ether ETF denial made by Bloomberg analysts can be countered by the fact that the same spot Bitcoin ETF applicants are competing to offer Ether-based products. Additionally, the spot Ether ETF applicants have a tight grip on what is needed by the US to ensure an imminent approval of the ETFs by May.
Moreover, the US SEC will be risking several lawsuits from the spot Ether ETF applications, especially after approving the Ethereum futures ETP.
This squares with what I’m hearing too but, to Jake’s point, that does not mean it won’t get approved this year, just that time is clearly ticking down to the May deadline with no meaningful engagement yet from SEC staff on applications.
But who knows they could go parabolic on… https://t.co/5EtKGL1YkI
— Eleanor Terrett (@EleanorTerrett) March 11, 2024
Ethereum Market Outlook
The Ethereum network recently completed the activation of the Dencun upgrade on the mainnet, which introduced several changes but mainly reduced the transaction fees on the layer two scaling solutions. The Dencun upgrade has turned out to be a classic sell-the-news event, with Ethereum price down more than 22 percent to trade around $3,147 on Wednesday during the early London session.
Nonetheless, the entire cryptocurrency market cap dropped by more than 6 percent in the past 24 hours to stabilize around $2.4 trillion. Most cryptocurrency traders have been risking off in the past few days ahead of today’s interest rates announcement by the Federal Reserve.
The Ethereum ecosystem has enjoyed significant support from institutional investors led by BlackRock, which recently tokenized $100 million through USDC stablecoins.
The move by BlackRock to tokenize on the Ethereum network has raised speculation on the inevitable approval of spot Ether ETFs. However, the US SEC is keen not to trigger a precedent where more spot altcoins ETFs led by Solana SOL, and XRP are all applied due to heightened institutional demand.
