The price of Ether (ETH) surged by more than 10% after two prominent Bloomberg ETF analysts significantly increased their predictions of the U.S. Securities and Exchange Commission approving spot ETH ETFs.
“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), so now everyone scrambling (like us everyone else assumed they’d be denied),” tweeted Bloomberg Senior ETF Analyst, Eric Balchunas.
This week, the SEC faces several final deadlines for approving or denying spot ETFs after having postponed decisions on these funds multiple times.
The SEC is set to decide on VanEck’s application for a spot ETF on May 23 2024 followed by a final decision on ARK Invest/21Shares’ application the next day. Additionally, applications from BlackRock, Fidelity, and Grayscale are also pending before the SEC.
Although SEC Chair, Gary Gensler, has publicly stated that Bitcoin is a commodity, the regulatory agency has remained silent on Ethereum’s status. As recently as March 2024, Gensler declined to comment on the regulatory classification of Ethereum.
In a lawsuit filed late April 2024 by the Ethereum software company, Consensys, the firm alleged that for over a year, SEC has internally considered Ethereum as a security. Among other requests, the company asked a federal judge in Texas to declare Ethereum as a commodity.
Before approving spot Bitcoin ETFs in January 2024, the SEC had denied similar applications for ten years citing concerns about fraud and market manipulation in the Bitcoin spot market. In addition, the regulator had said that surveillance agreements, which monitor the Bitcoin futures market for already approved ETFs, would not be adequate.
Ultimately, a federal appellate court deemed that reasoning flawed and ordered the SEC to overturn its prior rejection of Grayscale’s application to convert its flagship trust into an ETF.
It is worth noting that the SEC approved Ethereum futures ETFs in October 2023.
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