Diminishing Hopes for Ethereum ETF Approval by May 2024

The dream of a readily available Ethereum ETF by May 2024 appears to be fading, with recent developments suggesting a significant decrease in its likelihood. Here is a take on the recent developments in this regard.

Key Takeaways

  • Low communication from SEC– Communication between the US Securities and Exchange Commission and prospective ETF issuers has been virtually non-existent. This is a major cause for concern. With only 73 days remaining until the May deadline, the usual process involving feedback, revisions, and meetings appears to be stalled.
  • SEC Chair’s stance– Gary Gensler, the SEC Chair, has historically classified Ethereum as a security. This viewpoint makes him hesitant to approve ETH ETFs unless he reclassifies them as a commodity similar to Bitcoin.
  • Political backlash concerns– Following the approval of Bitcoin ETFs and the SEC’s legal defeat against Grayscale in August 2023, Gensler might be wary of further political criticism surrounding another crypto-related decision.

Shifting Sentiment and Analyst Opinions

Bloomberg ETF analyst Eric Balchunas has significantly reduced his initial estimate. He now places the chances of ETH ETF approval by May 2024 at a mere 35%. This revised outlook reflects the concerning lack of progress and communication observed in recent months.

There is growing skepticism around the situation. Unlike the positive and bullish sentiment surrounding the Bitcoin ETF approval process, the current situation with Ethereum ETFs seems to be moving in the opposite direction. Analysts are reporting a growing sense of skepticism, with negative indicators accumulating.

Industry Skepticism

Several major financial institutions have also expressed doubts about meeting the May deadline. JPMorgan and TD Cowen have lowered their expectations.

GSR, a crypto market-making firm that initially estimated a 70% chance of approval, has acknowledged that their optimism might wane if there is no visible progress in the next month.

Past May 2024- A Look Towards the Future

The current price of Ethereum (as of March 12, 2024) is $4,021. Several companies, including BlackRock and Fidelity, have filed applications for Ethereum ETFs. While the current situation appears unfavorable, some experts believe that a spot ETH ETF is inevitable in the long run. Eric Balchunas maintains that approval will likely happen eventually, but the exact timeframe remains unclear.

Moreover, resolving the current regulatory issues surrounding crypto ETFs is expected to pave the way for future approvals.

There are also potential turning points that may impact the outcome.

One of these is the upcoming US presidential election on November 5, 2024. A change in leadership, either through a new president or a reshuffle within the SEC, could lead to a more favorable stance toward cryptocurrency regulations. 

Final Thoughts

The current outlook for Ethereum ETF approval by May 2024 is not promising. The SEC’s lack of communication and the potential roadblocks posed by the SEC Chair’s stance raises significant concerns. However, long-term optimism is still there, with the expectation that regulatory hurdles will eventually be addressed, opening the door for future approvals.

It is important to note that this is a complex situation with evolving factors. Hence, it will be helpful to stay informed by following credible sources for the latest updates on the regulatory situation surrounding crypto ETFs.




Maxwell Peterson

Maxwell Peterson is a distinguished cryptocurrency expert, hailing from San Francisco, California. He holds a Bachelor of Science in Computer Science from Stanford University and a Master's in Financial Technology from the University of Edinburgh. His passion for blockchain technology and its potential to revolutionize the financial industry has driven him to become a leading voice in the cryptocurrency community. Maxwell is committed to making complex financial concepts accessible to a broader audience, dedicating his career to educating people about the benefits and intricacies of cryptocurrencies.

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