One of the major players in the cryptocurrency exchange space, Coinbase, has expressed a level of optimism regarding the approval of spot Ethereum ETFs by the SEC. Despite the current uncertainty surrounding the decision, Coinbase Institutional Research Analyst David Han believes that there is a 30% to 40% chance of approval by the end of the month. Han points to the success of spot Bitcoin ETFs and the correlation between CME futures products and spot exchange rates as possible indicators for the approval of Ethereum ETFs.
Han also highlights the significance of cryptocurrency in US politics and how this may influence the SEC’s decision. He suggests that denying spot ETH ETFs could potentially impact the outcome of elections, prompting the SEC to carefully consider their stance. The political landscape, with a mix of Democrats and Republicans among the voting commissioners, adds an additional layer of complexity to the decision-making process.
Each spot ETH ETF application has a different decision deadline, with VanEck’s application requiring a decision by May 23. However, BlackRock and Fidelity’s applications have a longer timeline, extending to August. Han speculates that a rejection in May could lead to legal challenges that may alter the decision, similar to a previous lawsuit that influenced the approval of spot Bitcoin ETFs.
Bloomberg analyst Eric Balchunas has offered a contrasting view to Coinbase’s optimism, expressing doubts about the likelihood of spot ETH ETF approvals. He views Coinbase’s stance as a risky PR move, suggesting that their predictions are “braver and riskier reputationally” compared to other market estimates. Balchunas’ earlier predictions in May and March indicated low approval odds for spot Ethereum ETFs.
The uncertainty surrounding the approval of spot Ethereum ETFs reflects the evolving nature of the cryptocurrency market and its intersection with regulatory bodies like the SEC. While Coinbase remains cautiously optimistic about the outcome, other analysts and experts offer contrasting views on the likelihood of approval. The political landscape, decision deadlines, and potential legal challenges all contribute to the complex and uncertain future of Ethereum ETFs. Only time will tell how the SEC navigates these challenges and determines the fate of spot Ethereum ETFs.