Key Points
- Bloomberg analysts reduce the probability of a spot Ethereum ETF approval in May to 30%.
- Concerns raised due to lack of progress and movement in the Ethereum ETF approval process.
Bloomberg ETF analysts have significantly decreased their odds for a spot Ethereum ETF approval in May to just 30%. Eric Balchunas, a Bloomberg Senior ETF Analyst, had earlier predicted a 70% chance of approval by May. His colleague, James Seyffart, had estimated a probability of 60-65%.
Ethereum ETF Approval Odds
Seyffart commented that the current Ethereum ETF cycle seems to be the opposite of the Bitcoin ETF approval odds. He noted a lack of optimism due to the lack of movement as the deadline approaches.
On March 8, Coinbase and Grayscale had discussions with the SEC about possibly converting Grayscale’s Ethereum Trust into an ETF. Balchunas remarked that this would typically be a positive sign. However, he added that the SEC had not yet commented on the issuers.
Lowering Expectations for Ethereum ETF Approval
The past few months have seen a decrease in confidence for an imminent approval. The primary reason seems to be the absence of filing changes for such products, which were observed prior to the Bitcoin ETF approvals.
In January, GSR, a crypto market-making firm, estimated the chances of approval at 70%. While the firm still leans this way, research analyst Brian Rudick noted that their estimates might soon change. He pointed out the lack of movement with the spot Ethereum ETF applications, unlike the spot Bitcoin ETF applications.
Rudick noted that GSR still expects the Ethereum ETF applications to play out similarly to Bitcoin because of the requirement for similar treatment of spot and futures-based applications.
Jake Chervinsky, Variant Fund Chief Legal Officer, expressed his concerns about the lack of progress and maintained his skeptical view. He also mentioned that the general sentiment in this early-mid bull market is overestimating the chance of approval given all of the political and strategic factors weighing against it.
Chervinsky added that if there are no signs or reports as the May 23 deadline approaches, that silence will speak volumes.
Investment banks JPMorgan and TD Cowen estimate that spot Ethereum ETFs won’t be approved by May.
