Ethereum ETF Approval Chances Dropped to 30%, According to Bloomberg Analysts
Bloomberg ETF analysts have revised their estimate for the chances of an Ethereum (ETH) exchange-traded fund (ETF) approval in May to 30%. This marks a significant decrease from the previous estimate of 70% made in January. The analysts, Eric Balchunas and James Seyffart, believe that the lack of progress and movement in the filing process for Ethereum ETFs is a key factor contributing to the lowered approval odds.
Background on Ethereum ETF Approval
In March, Coinbase and Grayscale met with the Securities and Exchange Commission (SEC) to discuss the possibility of converting Grayscale’s Ethereum Trust into an ETF. While this meeting would typically be seen as a positive sign, Eric Balchunas noted that there had been no official comments from the SEC regarding the issuers.
Lowering Chances of Approval
The past few months have dampened expectations for an imminent approval of an Ethereum ETF. One of the main reasons for this is the lack of changes in filing procedures, which were seen prior to bitcoin ETF approvals. Market-making firm GSR initially estimated the chances of approval at 70%, but research analyst Brian Rudick suggests that this estimate may need to be revised due to the lack of positive progress.
Lack of Movement
- GSR believes that if positive progress is not seen within the next month, they will lower their approval odds.
- Spot Bitcoin ETF applications saw movement in October ahead of their January approval, but similar progress has not been observed for spot Ethereum ETFs.
Skepticism and Uncertainty
- Jake Chervinsky, the Chief Legal Officer of Variant Fund, shares concerns about the lack of progress and maintains a skeptical view.
- Chervinsky believes that the chances of approval may be overestimated due to various political and strategic factors weighing against it.
- He expects more signals from the SEC in the coming weeks to determine which direction they are leaning.
Estimates from Investment Banks
- JPMorgan and TD Cowen estimate that spot Ethereum ETFs will not be approved by May.
Despite the lowered chances of approval, it is important to note that there is still a possibility for an Ethereum ETF to be approved this year. However, the lack of progress and movement in the filing process raises doubts about its likelihood. Traders and investors will need to closely monitor any updates or signals from the SEC as the May deadline approaches to gain a better understanding of the regulatory landscape for Ethereum ETFs.
Hot Take: Uncertainty Surrounding Ethereum ETF Approval
The chances of an Ethereum ETF approval in May have been significantly reduced to 30%, according to Bloomberg analysts. The lack of progress and movement in the filing process for Ethereum ETFs has contributed to this decrease in approval odds. While there is still a possibility for approval this year, skepticism remains due to various political and strategic factors. Traders and investors should closely monitor any updates from the SEC in the coming weeks to gain insights into the regulatory outlook for Ethereum ETFs.
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