Bloomberg Analysts Increase Approval Odds
Bloomberg ETF analysts Eric Balchunas and James Seyffart have significantly increased their predictions for a spot Ethereum exchange-traded fund (ETF) being approved in the US. They now say there is a 75% chance of approval, up from their previous estimate of 25%. This change in odds has had an immediate impact on the market, with the price of Ethereum (ETH) jumping 9.3% after the announcement.
Reasons Behind the Increased Odds
The analysts explained that their earlier low odds were due to the lack of interest from the SEC (Securities and Exchange Commission) in discussing the approval of an Ethereum ETF. However, recent political developments have led Balchunas to believe that the SEC might be changing its stance. He mentioned on social media that the regulator might do “a 180 on this issue.” This shift in perspective is significant because both Balchunas and Seyffart are waiting for additional filing documents that could increase the odds even more.
Reaction from the Crypto Community
Seyffart shared his thoughts on social media, joking about how Ethereum supporters, often referred to as “Ethereum bulls,” might react if their prediction turns out to be true. He mentioned that if the approval happens, they would not hear the end of it from the Ethereum community. Seyffart also said they have heard from multiple sources and expect a surge in ETF filings in the coming days if their prediction is accurate.
Important Deadlines for ETF Approvals
The first key deadline for an Ethereum ETF approval is on May 23, when the SEC will decide on VanEck’s Ethereum ETF filing. Following that, the SEC must make a decision on the ARK21 Shares Ethereum ETF by May 24. The final deadline for the month is May 30, when the SEC will decide on the Hashdex Nasdaq Ethereum ETF filing.
Industry Reactions and Predictions
According to Bitcoin News Crypto, many in the industry were not expecting a spot Ethereum ETF approval in the US this week. Katherine Dowling, the general counsel for ETF applicant Bitwise, mentioned that most people were expecting a disapproval order. VanEck CEO Jan van Eck also predicted a likely denial during a recent CNBC interview.
Market Impact and Price Movements
In the last 24 hours, nearly $150 million in short positions in crypto derivatives have been liquidated, as reported by data aggregator Coinglass. Out of this total, $35.3 million were related to positions shorting ETH. This market activity reflects the changing sentiment and the impact of the increased odds of ETF approval.
Ether Price Surge
On Monday, during U.S. trading hours, the price of ether (ETH) surged more than 10%, reaching $3,400. This increase came after Bloomberg analysts Eric Balchunas and James Seyffart updated their odds for the SEC approving a spot Ether ETF to 75%. The news that the SEC might reverse its position on this issue has caused a scramble among investors, who had largely assumed that the ETF proposals would be rejected.
Broader Market Effects
Bitcoin (BTC) has also seen gains alongside Ethereum’s rise, with its price increasing by more than 5% and approaching the $70,000 mark. Additionally, the Grayscale Ethereum Trust (ETHE), which is a closed-end fund that Grayscale has proposed converting into a spot ETF, has seen a significant increase. The fund has been trading at more than a 20% discount to its net asset value as investors bet against SEC approval, but it surged by more than 23% on Monday.
The potential approval of a spot Ethereum ETF by the SEC has created a wave of optimism and activity in the cryptocurrency market. Bloomberg analysts’ increased approval odds to 75% have driven a significant price jump for Ethereum and other cryptocurrencies. With key deadlines approaching, the market is closely watching the SEC’s decisions, which could further impact the prices and overall sentiment in the crypto industry. The changing political landscape and the SEC’s potential reversal on ETF approvals have added a new layer of complexity and excitement to the future of Ethereum ETFs.
