Will SEC Approve Ethereum ETF By May? Chances Declined To 25%

Technology

Is Thursday D-Day for SEC’s Decision? – Crypto News

Published

1 year ago

May 22, 2024

Dripp

Hopes for a spot Ethereum ETF approval have surged dramatically. On the afternoon of May 20, Bloomberg ETF analyst Eric Balchunas posted on X, indicating a significant shift. He raised the odds of a spot Ethereum ETF approval from 25% to 75% after hearing rumors that the SEC might be reconsidering its stance.

Ethereum ETF Approval Odds Surge to 75%

Eric Balchunas believes the Ethereum ETFs have a solid chance of at least partial approval by Thursday, the final decision deadline for the VanEck Ethereum ETF application. Balchunas argues that the SEC might approve the 19b-4 filings, which would allow ETH ETFs to be listed on exchanges. He believes the SEC may be considering a major shift, raising his confidence level to 75%. However, they would still need S-1 approval and a detailed registration document for each ETF. He suggests this move would enable the SEC to start the process while having time to thoroughly review each application before making a final decision.

While Balchunas is a respected insider with credible information, his perspective is not the only one to consider. Other analysts and market participants are also weighing in on the probability of an Ethereum ETF approval this week. Eleanor Terrett, another analyst, noted that conversations between SEC staff and issuers have begun, with indications that there is still “work to do” on the S-1 filings.

Also Read: BlackRock, Bitwise Updates Spot Ether ETF Application

Polymarket Sees Increased Activity on ETF Bets

Polymarket, a platform that allows users to bet on event outcomes using cryptocurrency, has seen significant activity following Balchunas’ announcement. Before the news broke, the site priced in a 10% chance of ETF approval by May 31. However, within hours, the odds surged to nearly 75%, and currently, they hover around 70%. This means bettors could earn nearly 50% returns if the ETF is approved. Conversely, betting against approval could yield returns of over 200%.

Polymarket hosts various events to bet on, including political outcomes and social media predictions. The Ethereum ETF bet specifically states it “will resolve to ‘Yes’ if any spot Ethereum ETF receives approval from the SEC by May 31, 2024.” This language has led to some debate, as approvals may need to be more straightforward. Nonetheless, the bet offers insight into how market participants view the likelihood of an ETF approval by the end of the week.

Regulators are also examining whether Ethereum should be classified as a security following its transition to a Proof-of-Stake (PoS) consensus. This classification could significantly impact the ETF approval process. An approval of spot Ethereum ETFs might suggest that the SEC no longer views Ethereum as a security.

Balchunas’ optimism is grounded in the belief that the SEC might be willing to move forward with ETF approvals while continuing to evaluate the necessary documentation. However, as Terrett points out, procedural steps and regulatory considerations still need to be addressed.

Also Read: Pro-XRP Lawyer John Deaton Reacts To SEC’s Turnaround On Spot Ethereum ETF