The spotlight is now on the potential approval of a spot Ethereum ETF, following the green signal for 11 spot Bitcoin ETFs. Although many people are wondering if a similar approval is in the cards for Ethereum.
However, getting approval is tricky because of unclear rules from the Securities and Exchange Commission (SEC) about how to treat Ethereum.
SEC Uncertainty on Ethereum
The Securities and Exchange Commission (SEC) hasn’t made up its mind on whether Ethereum (ETH) is a security. Perhaps this uncertainty might stop an ETF from getting the thumbs up. Also, the SEC had some issues with approving Bitcoin ETFs, and that’s making folks wonder if Ethereum will face the same.
Despite the challenges, some optimists see recent successes, such as Grayscale’s Court of Appeals victory and the approval of the Ethereum Futures ETF, as positive signs. They believe that approval for an Ethereum ETF is on the horizon. In case of a “no” from the SEC in May, they anticipate an appeal, with the hope that the SEC might change its stance to avoid complications.
Brett Tejpaul, the head of Coinbase Institutional, recognizes the growing interest in a spot Ethereum ETF among Coinbase’s customers. However, the SEC’s reluctance to definitively label Ethereum as a security adds complexity, potentially influencing the destiny of an Ethereum ETF.
What Analysts Say
Eric Balchunas is more optimistic, giving a 70% chance for an Ethereum ETF approval, while James Seyffart is more cautious, estimating it to be around 60-65%. Although they acknowledge both positive and negative aspects, they believe the odds are relatively better compared to other cryptocurrencies.
Bitwise, a company involved in Bitcoin ETFs, is also optimistic about the possibility of an Ethereum ETF. They highlight the necessary ingredients, such as a robust market for Ethereum futures. However, they acknowledge that Ethereum’s complexity compared to Bitcoin makes it uncertain when approval might happen
Some Doubters Careful Approach
However, skeptics argue that the SEC’s historical delays in approving cryptocurrency matters cast doubt on a swift approval for an Ethereum ETF. They point out that since most cryptocurrencies are viewed as investments, securing approval for Ethereum, which doesn’t fit that mold, could be challenging.
JPMorgan analysts echo this skepticism, noting the uncertainty of the SEC treating Ethereum as a regular commodity for May’s approval.
Adding to the caution, investment bank TD Cowen suggests the SEC might prefer observing Bitcoin ETF performance before deciding on others. Meanwhile, the desire for an Ethereum ETF is strong, but challenges persist. Some remain hopeful, while doubts linger, creating a waiting game for the crypto community.
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