Bloomberg’s analysts monitoring ETFs have made a surprising adjustment, raising the probability of approving spot Ethereum ETFs from 25% to 75%.
What’s Behind It?
Recent developments indicate a shift in the Securities and Exchange Commission’s (SEC) stance on denying spot Ethereum ETFs. According to senior Bloomberg ETF analyst Eric Balchunas, this sudden change has caught many off guard, prompting issuers to hasten their application processes before the looming May 23 deadline.
Despite the Biden Administration’s recent anti-crypto leanings, Balchunas suggests that the increasing politicisation of cryptocurrency is a significant factor in this reversal.
Initially, sentiments were pessimistic about Ethereum’s chances for ETF approval, with market indicators showing just an 11% likelihood. However, with the ETH/BTC ratio gaining momentum, the probability now exceeds 50%, marking a notable turnaround.
While Balchunas attributes the SEC’s shift to political pressure, the inevitability of Ethereum ETF approval has been apparent for some time. The approval of commodity futures-based ETH ETFs last October solidified Ethereum’s position as a non-security.
Experts had previously pointed to a lack of communication between the SEC and potential issuers as a signal for denial. However, with renewed confidence in approval, the consensus among crypto market participants is that the green light for ETH ETFs is highly probable come Thursday.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they’d be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024