Ethereum
Will approvals happen this week?
Bloomberg Analyst Increases Spot Ethereum ETF Approval Chances to 75%: Will Approvals Happen This Week?
On Monday, May 20, Bloomberg ETF analyst Eric Balchunas published an article on X, increasing his chances of an ETF spot approval from 25% to 75%. In one hour, the post was viewed more than a million times. Balchunas is considered one of the most trusted sources in the crypto ETF space after playing a role in media coverage of the Bitcoin spot ETFs, which were released in January 2024. Balchunas’ update made waves across the crypto markets, causing the price of ETH to skyrocket over 10% in a matter of minutes.
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Balchunas said he was “hearing talk this afternoon that the SEC might do a 180” Ethereum Spot ETF applications. The SEC has been largely silent about Ethereum ETFs in recent months, primarily seeking to decide whether ETH should be classified as a security or a commodity. Because the SEC has been so quiet, many viewed this as a negative for the ETH ETF’s chances of one-time approval. However, with a final deadline for several ETFs on May 23-24, there appears to be pressure on the SEC to make decisions before the deadline.
To add more context to Balchunas’ messagehe alluded to another tweet from Nate Geraci, a crypto ETF expert. Geraci’s tweet noted that “the SEC must approve both 19b-4s (exchange rule changes) and S-1s (registration statements) for the launch of ETFs. Technically possible for the SEC to ‘approve 19b-4s, then slow-play S-1s (especially given the lack of engagement reported here).”
Essentially, the SEC could give ETFs a partial green light, giving them time to take a closer look at S-1s, which would allow them to better review applications to see how compliant they would be. This seems like the most logical solution, as the SEC is in the middle of a large debate surrounding ETFs, which may take longer to conclude than previously thought.
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Another point of context is that ARK and 21Shares recently amended their request to remove staking. This decision was likely made in an effort to make their candidacy more attractive to the SEC. While removing staking is obviously negative for the ETF, it could play a role in increasing the chances of approval.
The buzz Balchnas hears must be significant. Less than a week ago he posted saying he thought the chances of a spot ETH ETF were “thin or no“, but has since raised its forecast to 75%.
The story continues
The journey of Ethereum ETFs shares some similarities with the approval of the spot Bitcoin ETFs, with the SEC remaining largely silent in the weeks and days leading up to the approval. While the situations are vastly different, this shows that it is entirely possible that the SEC could approve spot ETH ETFs later this week despite the SEC’s relative silence.
A spot Ethereum ETF would be a significant step in crypto adoption, allowing a whole bunch of new investors access to the token and could potentially send ETH to new ATHs above the 4,900 level $.
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This item Bloomberg Analyst Increases Spot Ethereum ETF Approval Chances to 75%: Will Approvals Happen This Week? originally appeared on Benzinga.com
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