As the 'D-day' for the listing of the second-largest cryptocurrency by market capitalization, Ethereum spot exchange-traded fund (ETF), approaches, expectations for approval are rapidly gaining momentum within the investment industry.
On the 20th (local time), Eric Balchunas and James Seyffart, ETF analysts at Bloomberg Intelligence, raised the probability of Ethereum spot ETF approval from the previous 25% to 75%, tripling their estimate. Balchunas posted on his social media, “I heard this afternoon that the SEC might reverse its stance 180 degrees on this increasingly political issue,” reflecting this analysis.
According to the industry, at least ten firms have applied to the U.S. Securities and Exchange Commission (SEC) to trade Ethereum spot ETFs, and a decision on VanEck, the asset management company that first applied for Ethereum spot ETF trading, is expected on the 23rd. The industry is closely watching VanEck’s approval outcome as it could mark a turning point for Ethereum spot ETFs entering the U.S. financial system.
Until now, the industry had anticipated that approval of this Ethereum spot ETF would not be easy. The SEC had requested various supplementary documents from applicants several weeks before approving the Bitcoin spot ETF in January, which ultimately played a crucial role in securing approval for the Bitcoin spot ETF.
In the case of the Ethereum spot ETF, the absence of such behind-the-scenes work led to a conclusion that approval would likely be denied.
However, Bloomberg reported on the 20th, citing sources familiar with the matter, that the situation has reversed this week as the SEC began requesting supplementary documents for approval.
Ethereum spot ETF applicants reportedly received a request from the SEC on this day to update and submit documents (19b-4). Form 19b-4 is used to notify the SEC of rule changes allowing ETFs to be bought and sold on exchanges. As this is considered a key document for ETF approval, interpretations suggest that optimistic prospects for approval are spreading.
Chris Newhouse, decentralized finance analyst at Cumberland Labs, said, “While the industry had completely ruled out the possibility of approval, speculation that the SEC might lean toward approval has spread,” adding, “Many traders are actively moving to take positions.”
Last month, Ethereum’s price fell about 20% as uncertainty over spot ETF approval grew within the industry. Since the beginning of this month, Ethereum has shown a slight upward trend and surged about 14% on this day, marking the largest increase in a year and a half.
However, voices cautioning prudence in unconditional buying remain, given that forecasts still exist that the SEC may reject the Ethereum spot ETF approval.
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