Ether spot ETF approval by GSR down to 20% 😱

Spot Ether ETF Approval Unlikely in May: GSR Lowers Estimate to 20%

According to GSR analyst Brian Rudick, the probability of a spot Ethereum ETF approval in May has dropped significantly. GSR now estimates a mere 20% chance of SEC approval for a spot Ether ETF next month. This is a substantial decrease from the 75% likelihood projected by GSR in January. The optimism seen earlier was attributed to Grayscale’s Court of Appeals victory and the approval of Ethereum Futures ETFs in October.

Potential Spot Ether ETF Approval Postponed to 2025-2026

Rudick highlights the lack of engagement from the SEC and potential political pressure as factors contributing to the reduced chance of approval. He believes that the SEC’s ongoing investigation into whether Ethereum is a security could significantly impact the approval odds. The current estimate by GSR suggests that spot Ethereum ETFs may not be approved until 2025-2026, following a prolonged and possibly litigious process.

Rudick’s reasoning for the prolonged approval process

Little engagement from the SEC
Political pressure against digital asset ETFs
SEC’s investigation into Ethereum’s security status

ETF Applications Revised to Include Staking

Rudick notes that some issuers have modified their ETF applications to incorporate ether staking, potentially adding complexity to the approval process. While ETFs with staking might be more appealing to investors, Rudick questions the issuers’ motivation for introducing these changes. He speculates that these amendments could be a response to the SEC’s inactivity or a strategic move to lay the groundwork for future developments in staking.

Rudick’s speculations on the amended ETF applications

Competitive dynamics of ETFs with staking
Issuers’ intentions behind the amendments

Bloomberg Analysts Align with GSR’s Lowered Expectations

Bloomberg ETF analysts have also slashed their estimates for a spot Ethereum ETF approval in May, now placing the odds at 30%. This reduction from earlier forecasts further solidifies the growing skepticism around the imminent approval of a spot Ether ETF. Eric Balchunas and James Seyffart from Bloomberg had previously projected higher chances of approval, but recent developments have led them to reevaluate their estimates downward.

Bloomberg analysts’ revised estimate for spot Ether ETF approval

30% likelihood according to Eric Balchunas
Previous projections by James Seyffart

Bleak Outlook for Spot Ethereum ETF Approval

The prevailing sentiment among industry experts, including analysts from GSR and Bloomberg, suggests that the approval of a spot Ether ETF in May is highly unlikely. Various factors, such as regulatory scrutiny, lack of SEC engagement, and strategic maneuvers by ETF issuers, have contributed to a more conservative stance on the matter. The timeline for spot Ethereum ETF approval has been extended to 2025-2026, with significant uncertainties surrounding the approval process.

Hot Take: Brace for Prolonged Wait for Spot Ether ETF Approval

As the odds of a spot Ethereum ETF approval dwindle, the crypto community braces for a protracted wait until 2025-2026 when the approval might materialize. Industry analysts and experts foresee significant challenges and regulatory hurdles impeding the swift approval of a spot Ether ETF. While the initial optimism surrounding May approval has waned, stakeholders are preparing for a prolonged and potentially arduous journey towards securing regulatory clearance for a spot Ethereum ETF.