Ethereum ETF Approval Incoming?

After months of bearishness, is an 11th hour reversal coming from the SEC?
Jack Inabinet Jack Inabinet May 20, 20241 min read
Ethereum ETF Approval Incoming?

Bloomberg’s ETF analysts have suddenly and unexpectedly increased their odds of spot ETH ETF approval from 25% to 75%!

What’s the scoop?

  • Renewed Communication: Senior Bloomberg ETF analyst Eric Balchunas claims that the SEC has suddenly reversed its decision to deny spot ETH ETFs, leading issuers to scramble to finalize applications ahead of the first final decision deadline on May 23.
  • Politically Motivated: While the Biden Administration has adopted a radically anti-crypto policy stance in recent weeks, Balchunas points to the increasing politicization of crypto as the driving factor behind the sudden shift.
  • Market Shock: Sentiment had been decidedly negative regarding Ether’s chances of spot ETF approval – with the market implied odds according on Polymarket indicating just an 11% chance of approval this morning – but this probability now stands above 50% for the first time since January as the ETH/BTC ratio is rebounding with strength.

Bankless Take:

Although Balchunas indicates that political pressure forced the SEC to cave on its denial stance, Ethereum's ETF approval appears to have been inevitable for many months.

ETF experts previously extolled that a lack of meaningful communication between the SEC and proposed issuers was a red flag indicating denial, but the decision to approve spot products was likely already made when the regulator approved commodity futures-based ETH ETF products last October, solidifying Ether's status as a non-security.

With the experts once again confident on approval, crypto market participants are coming to consensus that ETH ETF approval is likely certain to occur this Thursday.

Jack Inabinet

Written by Jack Inabinet

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Jack Inabinet is a Senior Analyst with a passion for exploring the bleeding edge of crypto and finance. Prior to joining Bankless, Jack worked as an analyst at HAL Real Estate where he conducted market research and financial analysis for commercial apartment development and acquisition activities in the Seattle region. He graduated from the University of Washington’s Michael G. Foster School of Business and remains based out of the Seattle area.

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