The discussion surrounding the approval of an ethereum exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC) is intensifying as the announcement date for the decision.
Bloomberg Senior ETF Analyst Eric Balchunas has shared a rather cautious outlook, estimating the probability of an eth spot ETF receiving the green light at just 25%.
ethereum Has a Slight Chance of Getting Spot ETF Approved
Skepticism about the unlikelihood of a timely approval of the eth ETF is rooted in what Balchunas perceives as a deliberate lack of commitment on the part of the SEC rather than mere procrastination, leading to an absence of positive indicators for the approval in the current environment.
Regarding the approval of the eth ETF, we are holding the line with a 25% probability, although to be honest, it is a very pessimistic 25%. The lack of commitment appears to be intentional versus procrastination. There are no positive signs or information anywhere you look. Personally I hope they approve it, but it doesn't look good. https://t.co/nuBdCDE18L
– Eric Balchunas (@EricBalchunas) March 25, 2024
The debate over the SEC's stance on a potential ethereum spot ETF is nuanced, with opinions divided within the industry. On the one hand, Balchunas has expressed disappointment over the lack of encouraging signs for the approval of the ethereum spot ETF despite being hopeful for a positive outcome.
On the other hand, Craig Salm, chief legal officer at Grayscale, offers a different perspective and suggests that the SEC's silence should not be interpreted negatively.
2/ In the last months before bitcoin?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”noopener nofollow”>#bitcoin ETF approval, @Grayscale and others received positive and constructive engagement from the SEC. We had thoughtful conversations and discussed the finer details of creation/redemption procedures, cash vs. kind, AP, LP, escrow, etc.
—Craig Salm (@CraigSalm) March 25, 2024
Salm maintains that many operational details relevant to an ethereum spot ETF have already been addressed during the bitcoin spot ETF approval process, implying that fewer aspects could require involvement this time around.
ethereum Market Performance Amid Regulatory Uncertainty
Despite differing opinions on the implications of the SEC's current levels of involvement, the agency's actions indicate a cautious approach toward ethereum and its classification.
Recent actions by the SEC, including crypto/2024/03/20/sec-gary-gensler-ethereum-security-commodity-crypto-foundation/” target=”_blank” rel=”noopener nofollow”>transmitter “Subpoenas” to crypto companies over their interactions with the ethereum Foundation have fueled speculation about a campaign to classify ethereum as a security.
This development, along with the regulator's historical hesitancy toward cryptocurrency ETFs, casts doubt on the immediate future of an eth spot ETF.
Amid this regulatory uncertainty, eth market performance has been noteworthy. In the last week alone, the cryptocurrency has seen a 10% increase in its value, with its price trading above $3,500 at the time of writing.
Featured image from Unsplash, chart from TradingView
