- Bloomberg analyst revises Ethereum ETF approval odds to 25{aa99edd08dd66036bd4af6c3dbe8af9b4ab31fcc55a521c2956d094a6dcd3a48}, amid skepticism over its near-term viability in the U.S. market.
- Coin Bureau CEO suggests delay in ETF approval might benefit the market, citing lack of immediate traditional finance interest.
SEC has opened the floor for public comments on three Ethereum exchange-traded funds (ETFs) proposed by Grayscale Investments, Fidelity, and Bitwise. This action on Tuesday follows the regulatory body’s history of requesting feedback from U.S. residents and organizations on similar financial products, a step seen before with Bitcoin ETF applications.
Apparently there’s a lot of people that need to hear this:
Asking for public comments on a 19b-4 is standard procedure. Every single 19b-4 ETF filing goes through the same process (whether approved or denied) It’s not “bullish” in any capacity for #Ethereum ETFs
That is all. pic.twitter.com/fbKMIQbSbC
— James Seyffart (@JSeyff) April 3, 2024
Each of these fund managers has submitted proposals for ETFs that would directly invest in Ethereum, allowing shares that reflect the cryptocurrency’s market value to be sold to investors.
This move comes after the SEC’s decision in January to approve 11 Bitcoin ETFs, a milestone that introduced these investment vehicles to stock exchanges, thereby offering traditional investors a new avenue to engage with cryptocurrencies indirectly.
As of now, Ethereum’s price is recorded at $3,314, remaining below its 2021 peak. The ongoing discussion about these ETFs revolves around their potential regulatory approval and the impact this could have on Ethereum’s valuation and the broader acceptance of cryptocurrencies among investors.
The build-up of anticipation has encountered several hurdles, notably a communication gap between the Securities and Exchange Commission (SEC) and ETF proponents, alongside an ongoing SEC inquiry into the Ethereum Foundation regarding Ethereum’s status as a security.
Seeing some of CT up in arms over $ARKB having an outflow day, which really shows the greedy and short-sighted nature of some of the folks in this space tbh. Pls let me offer some perspective:
1. ETFs see outflows, even Vanguard’s, it’s part of life, but overall they tend to be… https://t.co/hnFQUy3BaY— Eric Balchunas (@EricBalchunas) April 3, 2024
In these issues, Bloomberg’s ETF analyst Eric Balchunas has recalibrated the likelihood of an Ethereum ETF approval by May 23, marking it down to just 25{aa99edd08dd66036bd4af6c3dbe8af9b4ab31fcc55a521c2956d094a6dcd3a48}. This reassessment reflects a broader skepticism concerning the short-term viability of Ethereum ETFs in the American market.
By that time, we could be the full throes of a new Altcoin season with intense demand for alternative ETF products.
We could also be in the process of a change of hands at the SEC if you believe the latest polls.
So, net-net, a May delay may not be that bad
— Nic (@nicrypto) April 2, 2024
Despite the setbacks typically tied to regulatory hold-ups, Nic Puckrin, Coin Bureau’s CEO, offers a more hopeful perspective on the deferment of Ethereum ETF approvals. He remarked on the social platform X, acknowledging the slim chances of an ETH ETF materializing by May. He suggests, however, that this delay might not be detrimental.
Puckrin points to the lukewarm reception of Ethereum futures ETFs unveiled last October, suggesting that a hasty move towards Ethereum or other cryptocurrency products might not receive the warm welcome some expect. He emphasizes the current market’s lack of immediate interest in such products from traditional finance sectors.
Should we be worried about restaking risks? pic.twitter.com/ahVnhCW37s
— Coin Bureau (@coinbureau) April 3, 2024
Moreover, Puckrin highlights the absence of yield opportunities, such as staking, in Ethereum ETFs as a possible drawback. This feature, while appealing to investors for its profit potential, complicates the SEC’s approval process due to its complexities.
Puckrin also touches on regulatory concerns, specifically the SEC’s focus on Ethereum’s staking feature, which might lead to ETH being classified as a security—a development that could significantly impact Ethereum’s ecosystem and its associated financial products.
Matt Hougan from Bitwise shares Puckrin’s views, suggesting that delaying ETF approvals until December could result in a more favorable market environment. Speaking to Forbes, Hougan expressed confidence that the Ethereum ETF market would benefit from more time, allowing the traditional finance sector to familiarize itself with Bitcoin and the broader crypto landscape.
Puckrin concludes that a delay might align with a potential altcoin season and a possible change in SEC leadership, potentially creating a more favorable climate for Ethereum ETFs. This perspective provides a hopeful outlook on the postponement, viewing it as a preparatory period for a more receptive market and regulatory environment.
