Following recent developments, the probability of SEC approval for Ethereum ETF has increased to 75%. S-1 approval and detailed registration documentation are still required for each ETH ETF issuer. Polymarket’s probability of ETF approval by May 31 has increased from 10% to nearly 75%.
Ethereum ETF approval probability rises to 75%
cryptokoin.comAs you follow from , hopes for spot Ethereum ETF approval have risen dramatically. Bloomberg ETF analyst Eric Balchunas made a post on May 20 that pointed to a significant shift in X. He raised the probability of approval from 25% to 75% after rumors that the SEC would reconsider its stance. Eric Balchunas believes Ethereum ETFs have a chance to receive at least partial approval by Thursday, the deadline for the VanEck Ethereum ETF application.
Balchunas suggests that the SEC will approve 19b-4 filings that will allow ETH ETFs to be listed on exchanges. He raises his confidence level to 75% with the thought that the SEC will make a big change. However, they will still need S-1 approval and a detailed registration document for each ETF. He argues that this move will allow the SEC to start the process while it has time to thoroughly review each application before making a final decision.
Sources see Ethereum ETF approval probability high!
Balchunas is a respected insider with reliable information. However, his perspective is not the only one that reflects approval. Other analysts and market participants are also weighing the possibility of an Ethereum ETF approval this week. FOX reporter Eleanor Terrett reported that talks between SEC staff and issuers have begun. Additionally, there are indications there is still “work to be done” on S-1 filings, she said. In his last update, Terrett noted that he predicted that the SEC would approve 19b4s tomorrow:
I trust the ETF experts on this, but this seems to indicate SECGov will approve 19b4s tomorrow and then work with issuers on S-1s over the next few weeks/months?
Polymarket sees increased activity in ETF bets
Polymarket is a platform that allows users to bet on event outcomes using cryptocurrency. The platform saw significant activity following Balchunas’ announcement. Before Balchunas’ announcement, the site had priced the ETF’s chances of approval at 10% by May 31. However, within hours, rates rose to nearly 75%. At the time of writing, it is around 70%. This means that if the ETF is approved, punters could get a return of around 50%. Conversely, betting against approval can yield returns of over 200%.
Polymarket hosts a variety of events to bet on, including political results and social media predictions. The Ethereum ETF bet specifically states that “any spot Ethereum ETF will result in a ‘Yes’ if it receives approval from the SEC by May 31, 2024.” This language has sparked some controversy, as approvals may need to be simpler. However, the bet provides insight into how market participants view the likelihood of an ETF approval by the end of the week.
A critical point for Ethereum: Securities issue!
Regulators are also examining whether Ethereum will be classified as a security following its transition to Proof-of-Stake consensus. This classification has the potential to significantly impact the ETF approval process. Because the approval of spot Ethereum ETFs could indicate that the SEC no longer views Ethereum as a security.
Balchunas’ optimism is based on his belief that the SEC may be willing to move forward with ETF approvals while continuing to evaluate the necessary documentation. However, as Terrett noted, procedural steps and regulatory issues still need to be addressed.
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