The likelihood of spot ETFs on Ethereum being approved in May of this year looks quite low:
- JPMorgan analyst Nikolaos Panigirtzoglou estimates the odds of approval at 50%.
- Bloomberg analyst Eric Balchunas lowered the probability of approval to 35%.
- Market maker GSR specialists estimated the chances at 20%.
- Bloomberg analyst James Seyffarth believes the chances have been significantly diminished by the lack of constructive interaction between the SEC and ETF issuers.
- The SEC has postponed the deadline for reviewing applications for ETFs on Ethereum to the end of May, which could mean that the regulator is not ready for approval in the near future.
2. Possible approval or rejection of an Ethereum ETF could affect the ETH rate:
- Expectations and the launch of spot bitcoin ETFs in 2024 led to a rally of the leading cryptocurrency and a retracement to its ATH.
- The approval of ETH ETF could promote the development of the entire crypto market and the boost market cap to $4 trln by year-end.
- At the same time, the SEC’s refusal to approve spot ETH ETFs might negatively affect the price of the second largest cryptocurrency by capitalization.
3. In addition to Bitcoin and Ethereum, in the future the SEC may consider the possibility of approving ETFs for other leading cryptocurrencies such as Litecoin, Bitcoin Cash or Solana.
Overall, the likelihood of spot ETH ETF approval in May 2024 looks low. The regulator is in no hurry to make a decision, which may be due to the unsettled status of Ethereum in the United States. The SEC's decision will undoubtedly have an impact on the price of Ether, but it is difficult to clearly predict how powerful this effect will be.