The chances of the U.S. government approving spot Ether ETFs have increased, according to top Bloomberg ETF analysts. Initially viewed as unlikely, analysts James Seyffart and Eric Balchunas now see a 75% chance of approval, up from 25%, following recent developments.
“James Seyffart 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),” Bloomberg Senior ETF Analyst Eric Balchunas posted on X on Monday. Seyffart echoed these sentiments, noting improvements in the prospects for spot Ether ETF approvals this week.
Following their posts, Ether spiked 11.3%, rising from $3,090 to $3,439 within minutes, before settling at $3,381. Conversations between at least one potential issuer of a spot Ether ETF and the Securities and Exchange Commission (SEC) are reportedly progressing, according to an anonymous source.
Former President Donald Trump has positioned himself as a pro-crypto candidate, even accepting political donations in crypto and engaging with NFT buyers. Balchunas noted that denying the spot Ether ETFs could add to the perception that the current administration is anti-crypto.
The first deadline for proposed spot Ether ETFs is May 23, with VanEck’s proposal up first. A factor that might lead to the SEC’s denial is its hesitation in labeling Ether as a security. Recent reports indicate that the SEC has been subpoenaing companies associated with the Ethereum Foundation, further complicating the matter.
The SEC must decide on VanEck’s spot Ether ETF by May 23, with additional applications from ARK 21Shares, Hashdex, Invesco Galaxy, BlackRock, and Fidelity also awaiting decisions.
However, VanEck CEO Jan van Eck questioned the rumors around SEC’s approval, pointing to the regulator’s delays and reluctance. Similarly, asset manager Grayscale withdrew its application for an Ether futures ETF, and its CEO Michael Sonnenshein resigned on May 20.
Recent activity on X suggests that if spot Ether ETFs are denied, the issue will continue to draw attention, much like the focus on spot Bitcoin ETFs. Amid renewed optimism for approval, Ether liquidations surged, with $34.63 million worth of short positions being liquidated.
