As the crypto community eagerly awaits the potential approval of Ethereum (ETH) spot exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), recent developments suggest growing uncertainty surrounding the outcome. Eleanor Terrett, a respected crypto journalist, sheds light on the shifting sentiments regarding the SEC’s stance and its implications for the market.
Terrett’s Insights: A One-Sided Discussion
According to Terrett, optimism among crypto enthusiasts regarding the approval of at least one Ethereum spot ETF by May 23 is dwindling. Drawing from sources familiar with the matter, Terrett notes that recent conversations surrounding the approval process have been largely one-sided.
While issuers of prospective Ethereum spot ETFs have made efforts to persuade SEC staff to initiate the approval process, the securities regulator has shown reluctance, contrasting its approach with the relatively swift approval of Bitcoin spot ETFs.
Reasons Behind SEC’s Caution
Terrett outlines two key reasons behind the SEC’s cautious stance towards approving Ethereum spot ETFs. Firstly, SEC Chair Gary Gensler’s belief that the approval of multiple Bitcoin ETFs has already pacified the crypto industry plays a significant role. Gensler’s pivotal vote facilitated the approval of Bitcoin spot ETFs in the U.S.
Additionally, Terrett highlights the influence of anti-crypto politicians, such as Senator Elizabeth Warren, who have vehemently opposed the approval of crypto-based products. Politicians like Warren, critical of the SEC’s approval of Bitcoin spot ETFs, are actively working to prevent a similar outcome for Ethereum.
Growing Skepticism and Analyst Insights
With just two months remaining until May 23, Terrett’s sources suggest that the SEC must expedite its review of multiple Ethereum spot ETF applications to increase the likelihood of approval. Prominent ETF analyst Eric Balchunas, who previously predicted the approval of at least one Ethereum ETF by May 2024, now shares a less optimistic outlook.
Balchunas points to the SEC’s recent meeting with Coinbase representatives regarding Grayscale’s application for a spot Ethereum ETF as a cause for concern. Despite utilizing Coinbase as its custodian, the lack of comments from the SEC raises doubts about the prospects for Ethereum spot ETFs.
Moreover, Balchunas highlights the absence of any court losses motivating the SEC to approve Ether-based funds, unlike its response to the Grayscale Investments case in August. This further dims the prospects for Ethereum ETF approval in the near term.
Market Response Amid Uncertainty
Despite the dwindling optimism surrounding Ethereum spot ETF approval, the price of ETH continues to soar. Recently surpassing the $4,000 resistance level, ETH’s price surge reflects ongoing investor confidence in the cryptocurrency, despite regulatory uncertainties.
As the crypto market braces for potential regulatory developments, the fate of Ethereum spot ETFs remains uncertain, with implications for both investors and the broader cryptocurrency ecosystem.