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What's Up with the Ethereum ETF?

Traders are feeling less optimistic on a May approval.
Jack Inabinet Jack Inabinet Mar 20, 20242 min read
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market analysis What's Up with the Ethereum ETF?

Crypto Twitter has been awash with negative takes on the probability of ETH ETF approval, which were only reinforced this morning by a slew of negative headlines. What’s FUD, what’s truth, and is there an opportunity here?

Bloomberg’s ETF Analysts, who correctly anticipated the approval of spot BTC ETFs, have become increasingly pessimistic on the odds of spot ETH ETF approval in recent weeks. They cite the SEC’s failure to engage with ETF applicants on specifics of their applications as the driving motivator behind their shift in expectations.

This bearishness has been adopted by broader market participants, with the odds of spot ETH ETF approval occurring by the end of May – a critical deadline before which the SEC must issue final decisions for multiple applicants – falling to just 14% according to prediction markets.

While approval sentiment was already at lows, the hits kept coming this morning after multiple crypto media outlets published reports that the Ethereum Foundation (EF) issued a warrant canary, disclosing in a February 26 GitHub commit that it had received a voluntary and confidential inquiry from an unspecified state authority.

Unfounded speculation from one CoinDesk source indicated that the request could have come from Swiss authorities working with the SEC in relation to their ETH ETF approval process.

To top it off, Fortune Crypto released an audacious article indicating that the SEC was probing crypto companies, delivering targeted subpoenas requesting details on their interactions with the Ethereum Foundation in hopes of classifying Ether as a security!

As scary as the headlines appear, it is important to note that it is fairly common for crypto foundations to receive information requests from regulators, and it's unlikely that companies cited in the Fortune report had actual information related to the scope of ongoing SEC investigations beyond pure speculation.

ETH/BTC has been in decline since March 8, and while the Ratio managed to eke out gains early this morning, it has been battered lower with today’s release of negative news; for Ether bulls confident on the inevitability of ETF approval, the move lower provides an attractive entry opportunity on the pair, with key support resting just below.

 

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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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