KEY POINTS
- Bloomberg analysts increased their expectation of spot ETH ETF approval to 75%
- Balchunas said there was "chatter" regarding the matter becoming "increasingly political"
- Exchanges looking to trade the funds were reportedly asked to update their filings
Ether (ETH), the native cryptocurrency of the Ethereum blockchain, climbed Monday as analysts boosted their expectancy of the U.S. Securities and Exchange Commission (SEC) approving spot ETH exchange-traded funds (ETF).
The digital coin, which is the second-largest cryptocurrency in the market today, hit $3,700 Monday after struggling to reach $3,000 in the past few days. The surge came as Bloomberg analysts Eric Balchunas and James Seyffart increased their expectations regarding the much-anticipated approval of spot Ether ETFs.
Balchunas said he and Seyffart "are increasing our odds of spot Ether ETF approval to 75% (up from 25%)." He said there was "chatter" Monday afternoon that the SEC could possibly be warming up to the funds over an "increasingly political issue." He added that at this point, everyone in the crypto industry and the financial sector are "scrambling (like us everyone else assumed they'd be denied)."
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
Before Bloomberg analysts ultimately hiked their expectancy percentage of spot Ether ETFs' approval, Coinbase analysts projected in a report last week that the approval of the funds "are closer to 30-40% due to certain factors surrounding the products, particularly digital assets beginning "to take form as an election issue." At this point, it has become "less certain" for the Wall Street regulator to be "willing to front the political capital necessary to support a denial."
Also on Monday, exchanges looking to list and trade spot Ether ETFs have been asked by the regulatory agency to update their 19b-4 filings on an "accelerated basis," CoinDesk reported, citing three people familiar with the situation. The development doesn't guarantee that the SEC will actually approve spot ETH ETFs this month, but it does signal progress in talks toward the funds' approval, as per the report.
The SEC is expected to make a decision on the application of fund manager VanEck on Thursday. The investment management firm's CEO, Jan van Eck, said earlier last month that he thinks VanEck's application will "probably be rejected." At the time, he said "pins are dropping as far as Ethereum is concerned." CoinShares, another applicant, had similar pessimistic expectations.
News of the potential change of heart on the SEC's side comes just weeks after companies that filed to launch the products were expecting the regulator to reject the offering, given discouraging outcomes during meetings with SEC staff.
The SEC has yet to comment on the supposed progress in the journey of spot Ether ETFs. On the other hand, such big news has apparently affected the crypto's price. As of writing, ETH is trading between $3,500 and $3,600.
