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In a recent change of outlook, Bloomberg analysts have significantly lowered the forecast for the approval of an ethereum exchange-traded fund (ETF) for May, setting the probability at just 35%.
According to Eric Balchunas, the odds are down sharply from previous estimates, which ranged between 60% and 70%.
The review reflects growing skepticism about the regulatory green light for ethereum ETFs, in contrast to the previously more optimistic stance.
No signs of activity
The caution among analysts follows recent discussions between Coinbase, Grayscale, and the SEC over the possible conversion of Grayscale's ethereum Trust into an ETF. While these meetings would normally indicate a positive trajectory, the lack of subsequent comments from the SEC has tempered expectations.
Balchunas and other analysts, including James Seyffart and Eleanor Terret, said there is a clear lack of activity in regulatory circles even though the deadline is two months away.
In contrast, there was a flurry of activity between the SEC and spot bitcoin ETF issuers for more than 10 weeks before the applications were approved.
Seyffart said:
“This ethereum ETF cycle seems the opposite of the bitcoin ETF approval odds right now. The more we see/hear (and don't see/hear), the less optimistic I become.”
However, analysts added that activity could accelerate in the coming days. They also said there remains an expectation that an eth ETF will be approved sometime this year, although not in May.
Cautiously hopeful
Despite these lower expectations, some industry observers such as the Legal Director of Variant Fund, Jake Chervinskystay cautiously optimisticsuggesting that the coming weeks could provide clearer signals about the SEC's direction.
However, he also expressed concern that the SEC may treat ethereum as a security and be unwilling to approve applications without judicial intervention.
General sentiment appears to be veering toward skepticism, with major investment banks such as JPMorgan and TD Cowen also projecting an unlikely approval in May.
Unlike Bloomberg analysts, crypto market-making firm GSR has maintained a more hopeful stance, initially estimating a 70% chance of approval.
However, the company recently admitted that this optimism could soon fade if there is no visible progress in the next month.
Meanwhile, Standard Chartered has said several times that the SEC is likely to approve ethereum ETFs in May.
