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The broader crypto ecosystem is anxious to discover whether or not the United States Securities and Exchange Commission (SEC) will greenlight spot Ethereum Exchange Traded Fund (ETF) products, considering barely a month remains to the final deadline of VanEck’s application. As noted by Bloomberg ETF Analyst Eric Balchunas, the approval odds have now dropped to a "pessimistic 25%."
No applicant-SEC communication
According to the market analyst, the communication between the SEC and prospective applicants has been largely nonexistent. Pointing out the lack of engagement and purposeful procrastination, Eric Balchunas noted that the signs are not good.
He said there is no positive intel anywhere you look, adding that while he expects the product to achieve approval, things are not looking good at the moment.
The optimism for Ethereum ETF waned over the past few months, as have the approval odds, as projected by market analysts. In the run-up to the spot Bitcoin ETF approval in January, there was a lot of communication between the SEC and applicants with specific instructions on what to amend in their filings.
By this time in the Bitcoin ETF approval process, the regulator had also met with the exchange platforms where these offerings were meant to trade. The absence of these engagements with prospective Ethereum ETF issuers makes the likelihood very low.
Re Eth ETF approval, we are holding the line at 25% odds altho tbh it is a very pessimistic 25%. The lack of engagement seems to be purposeful vs procrastination. No positive signs/intel anywhere you look. Personally hope they do approve it but it just ain't looking good. https://t.co/nuBdCDE18L
— Eric Balchunas (@EricBalchunas) March 25, 2024
Ethereum security saga
One major hindrance to spot Ethereum ETF approval is the concern the market regulator might be nursing regarding its potential status as a security.
Recent reports highlight that the Ethereum Foundation is under investigation by an unnamed state authority. Then reports came in that the U.S. SEC has issued subpoenas to businesses that have links with Ethereum to understand the nature of their association. Speculations hold that the regulator wants to create a more feasible basis to label Ethereum a security.
Charter on X also holds that many are not pleased with the approval of the Bitcoin ETF by the SEC, and holding off on Ethereum’s might be the regulator’s way of righting its perceived wrong.