Ethereum ETF approval unlikely in May, top analyst warns


  • Nate Geraci says Spot Ethereum ETFs face slim chances for SEC approval in May due to a lack of engagement with issuers.
  • If Ethereum ETF applications are denied following the Bitcoin ETF legal victory, Grayscale or other ETF issuers may challenge the SEC.
  • Despite doubts, Ethereum’s $379 billion market cap underscores its significance, warranting attention from analysts and issuers.

Nate Geraci, the President of the ETF Store, stated that a “spot Ethereum ETF is not something the SEC would approve by May.” The drought in communication between issuers and investors can be considered a weak selection for approval. Debates about Ethereum ETFs have been predominantly one-sided rather than the vibrant discussions associated with the trading sessions that preceded the approval of Bitcoin ETFs.

Eric Balchunas, a senior ETF analyst at Bloomberg, very deftly sums up the SEC’s position that “silence is violence.” The SEC’s lack of feedback on Ethereum ETFs reduces the probability of their approval at this time. Balchunas makes a point that the SEC might receive another lawsuit if the applications of numerous Ethereum-backed ETFs are denied, which would indicate that either Grayscale or some other imaginative ETF issuers may challenge this decision.

Ethereum ETFs hold edge over Bitcoin ETFs

Geraci surmises that Eagle or other big-budget ETF issuers might sue the SEC for delaying the transaction of Ethereum ETFs. This is after Grayscale won its legal battle in August, wherein the U.S. District of Columbia Court of Appeals ruled in favor of Grayscale’s Bitcoin ETF application. Geraci suggests that this kind of legal battle might be considered as a strategic marketing cost that gives a company a strong competitive advantage in the market.

Some have also questioned the value of spot Ethereum ETFs. Maybe that’s the reason many of the launched future ETFs based on the value of the second-largest altcoin have not been welcomed well by the market. On the other hand, Geraci notes that the fact that Ethereum has the wave’s huge market cap of $379 billion is something that analysts and issuers should not ignore. Although investors appear to have less interest in the futures-based Ethereum ETFs, Geraci asserts that the Ethereum ETFs matter due to the significant developments over the Bitcoin ETFs.

SEC’s silence signals disapproval of Ethereum ETFs

The SEC staying mum on the prospect of ETFs based on Ethereum is a sign of the high disapproval of it in the short run, per the industry experts. The lack of direct contact with the issuers is the speculation fuel of the regulator’s position on the broader Ethereum-related investment products. Despite Bitcoin ETFs leaping forward, no one really knows that new hurdles for Ethereum ETFs will be placed on the way.

Analysts and market participants keep an eye on the SEC’s further actions, analyzing possible epiphenomenons that the rejection of Ethereum ETFs will cause. The crypto industry is still in limbo as there is no clear regulatory framework around the corner. The crypto industry is to figure out further regulations regarding Ethereum investment products. While the challenges are not ignored, the proponents of the Ethereum ETF still believe that one day, it will be approved because of the reference of the cryptocurrency in the broader financial sector.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

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