Along with Bitcoin, institutional investors are willing to gain exposure to some of the top altcoins. As a result, some of the top players like BlackRock are actively pursuing approval for a spot Ethereum ETF from the U.S. Securities and Exchange Commission (SEC).
Spot Ethereum ETF Holds 60% Approval Chance
Bloomberg Intelligence analyst James Seyffart suggested that there is an estimated 60% likelihood of spot Ethereum ETFs receiving approval in May. However, the recent postponement of decisions on potential ether ETFs from BlackRock and Grayscale by the Securities and Exchange Commission has impacted the outcomes. Other contenders for a spot ether ETF, including Ark 21Shares and VanEck, are also awaiting regulatory decisions.
May 23 is the upcoming crucial date in the spot ether narrative, according to Seyffart. On this date, the 240-day window for the SEC to make decisions on proposals from Ark/21Shares and VanEck will conclude. Speaking to Blockworks, Seyffart added:
“My base case is still probably around 60-ish percent that they’ll approve them. But there’s plenty of ways they can delay. So if the SEC wants to get geared up and ready to go and wants everyone to go at the same time, they’ll likely do it on May 23 unless they can figure out some way to deny or delay this whole process and do what they want”.
Nevertheless, when the May deadlines approach, the SEC has the option to request potential issuers to withdraw their applications or issue denials. According to Seyffart, if the SEC asks Ark/21Shares or VanEck to withdraw, it could be seen as a positive sign indicating potential approval. He added, “The SEC might just need more time to get up to speed with Ethereum versus Bitcoin.”
However, if the May approval for spot Ethereum ETF doesn’t work out, Seyffart believes that it shall happen next year in 2025.
ETF Approval Almost Guaranteed In Long Term
Van Buren Capital general partner Scott Johnsson shared his perspective on the potential roadmap for an ETH ETF in a recent post on X Thursday. While acknowledging the current nuances, he anticipates that, in the long term, the approval of an ETH spot ETF is highly likely.
The Road Ahead: A View on ETH Spot
This is intended to be a deep dive into the current landscape for crypto spot ETFs generally with emphasis on ETH. Will do this in 4 parts for ease of reference.
1 – General Roadmap
2 – Threshold Issue
3 – BTC Spot Approval
4 – ETH Analysis
— Scott Johnsson (@SGJohnsson) January 25, 2024
Johnsson sees the presence of ether futures ETFs as a positive factor for potential approval, considering the SEC’s previous approval of Bitcoin ETFs based on similar grounds. However, Seyffart suggested that the SEC might scrutinize spot ether ETFs, claiming the futures market lacks sufficient size, liquidity, or impact.
SEC Commissioner Hester Peirce, in a recent interview, expressed the view that the SEC shouldn’t require a court decision to recognize the arbitrary nature of its approach. She emphasized applying precedent to spot Ethereum ETF decisions.
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