Ethereum (ETH) has surged to $3,760 as of May 22, marking a remarkable 28% increase over the past week, propelled by growing anticipation of potential approval for spot Ether exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).
The SEC‘s recent move has sparked optimism among investors, as on May 20, the regulatory body requested major exchanges including Nasdaq, CBOE, and NYSE to refine their applications for listing spot Ether ETFs. These exchanges were given until the end of Tuesday to submit their amended filings.
In response, prominent ETF issuers such as Fidelity, VanEck, and ARK/21Shares swiftly submitted their revised applications, known as Form 19b-4 filings, which are crucial for obtaining the SEC’s approval for spot Ethereum ETFs.
This flurry of activity ignited a surge in Ether’s price, with the cryptocurrency spiking by as much as 18% on Monday, briefly surpassing $3,830 before stabilizing around $3,700 at the time of reporting.
VanEck’s application deadline is set for May 23, followed by ARK Invest/21Shares on May 24, marking a critical juncture in the ongoing saga of Ether ETF approvals.
The potential approval of these ETFs represents a significant milestone for the crypto industry, defying expectations of skeptics who anticipated regulatory hurdles.
Nonetheless, uncertainties persist, particularly given the cautious stance historically adopted by the SEC under the leadership of crypto skeptic Gary Gensler, regarding spot crypto ETFs due to concerns over market manipulation.
However, recent developments, including a court victory by Grayscale Investments forcing SEC approval of spot Bitcoin ETFs, may influence the regulatory body’s decision on Ether ETFs.
Besides the Form 19b-4 filings, ETF issuers must also secure S-1 approvals from the SEC, a process involving detailed scrutiny of the ETF’s objectives, strategies, and risks. The timeline for S-1 approvals can vary, potentially taking weeks to months before ETFs become tradeable on the market.
Amid speculation, industry experts are closely monitoring the situation, with Bloomberg ETF analyst Eric Balchunas revising his odds of spot Ethereum ETF approval from 25% to 75% following rumors of a potential SEC reversal.
Geoff Kendrick, Head of FX Research and Digital Assets Research at Standard Chartered Bank, shares similar sentiments, estimating an 80% to 90% chance of approval this week.
In light of these developments, the crypto betting platform Polymarket witnessed a significant shift in odds, reflecting growing confidence in ETF approval, with potential lucrative returns for investors.
The potential launch of Ether ETFs could have profound implications for both BTC ETFs and the broader altcoin market. While Bitcoin ETFs have dominated with $58 billion in assets under management (AUM) since their launch, Ether ETFs could carve out a significant market share, albeit facing challenges in matching the initial impact of Bitcoin ETFs.
Despite uncertainties, projections suggest substantial interest in Ether ETFs post-approval, potentially attracting billions of dollars in investment.
As speculation mounts, the listing of VanEck’s ETF by the Depository Trust and Clearing Corporation (DTCC) underlines the industry’s readiness for regulatory approval, signaling a pivotal moment for Ethereum and the broader crypto market.
However, amidst the optimism, it’s essential to acknowledge the inherent volatility and regulatory uncertainties within the crypto market, urging investors to exercise caution and conduct thorough due diligence before making investment decisions.
