The US Securities and Exchange Commission (SEC) is expected to make a final decision on at least one Ethereum spot ETF application on May 23, but multiple fund companies believe that the SEC will reject the approval.
(Background: If the SEC rejects the Ethereum spot ETF, what will happen? JPMorgan: It may face legal challenges and is likely to lose.)
Table of Contents:
Multiple fund companies expect the Ethereum spot ETF to be rejected
Coinbase is expected to have a 30% to 40% chance of approval
Bloomberg Analyst: This is Coinbase’s public relations strategy
For the future trend of Ethereum, the market is closely watching the SEC, which must make a final decision to approve or reject at least one Ethereum spot ETF application on May 23.
If approved, it may replicate the situation of Bitcoin spot ETF, stimulating the rise of Ethereum’s price. (Note: May 23 is the deadline for VanEck’s application for final approval)
However, Bloomberg reported today, citing insiders, that some fund companies expect to be rejected because the contact between the applicant companies and the SEC is not as frequent as before the approval of the Bitcoin spot ETF in January.
At that time, in the weeks leading up to the approval of the Bitcoin spot ETF, fund companies submitted multiple revised documents to meet the requirements of the SEC, paving the way for their approval. In contrast, the interaction between the Ethereum spot ETF and the SEC is much less.
Katherine Dowling, General Counsel of Bitwise, which applied for the Ethereum spot ETF in March, said that it is widely expected that a rejection decision will be received:
In addition, Coinbase, the largest exchange in the United States, also believes that the probability of the SEC approving the Ethereum spot ETF at the end of this month is only between 30% and 40%. However, in the report “Ethereum Outlook” released by its analyst David Han on the 15th, it still pointed out a key factor that may prompt the SEC to approve, which is the correlation between CME futures products and spot rates.
The report stated:
Han further stated that if this correlation analysis is valid, the remaining reasons for non-approval may be due to the inherent differences between Ethereum and Bitcoin, such as scale, depth, and the most crucial difference in consensus mechanisms.
Han admitted that the SEC’s silence has caused “uncertainty” in the market, and it is unlikely that Ethereum spot ETFs supported by collateral will be approved in the short term.
Another reason for Han’s optimism is that as cryptocurrencies gradually become an election issue, he believes that it is uncertain whether the SEC is willing to use its political capital to reject the launch of Ethereum spot ETF.
However, he emphasized that even if it is rejected on the first deadline of May 23 next week, he still believes that issuers have a high possibility of overturning this decision through litigation. In addition, he pointed out that not all Ethereum spot ETF applications need to be approved at the same time.
Regarding Coinbase’s analysis, Bloomberg analyst Eric Balchunas responded:
Balchunas also released a lower estimate on May 14, when he stated that the probability of approval for the Ethereum spot ETF was “negligible.”
(Related reports:
Michael Saylor: SEC will classify ETH as a security this summer, rejecting the Ethereum spot ETF
Standard Chartered Bank: The probability of approval for the Ethereum spot ETF is low, but ETH is expected to reach $8,000 by the end of the year, and the SEC will further postpone the decision to June
Financial lawyers predict that the Ethereum spot ETF will be rejected by the SEC next month! ETH/BTC ratio hits a three-year low)