As the financial industry closely watches the evolving landscape of cryptocurrency exchange-traded funds (ETFs), Bloomberg ETF analysts have significantly adjusted their expectations for the approval of a spot Ethereum ETF by May. The revised forecast suggests a sobering outlook for those hopeful of regulatory green lights in the near term.
Analysts Revise Ethereum ETF Approval Chances
In a recent update, Bloomberg Senior ETF Analyst Eric Balchunas indicated that the chance of a spot Ethereum ETF approval by May has been reduced to 30%. This adjustment marks a considerable downturn from the 70% chance he estimated in January. Similarly, colleague James Seyffart had previously assessed the odds at 60-65%.
The reassessment is fueled by a growing skepticism as the deadline approaches without significant progress. Seyffart noted the lack of developments, stating, "We're ~73 days from the deadline and there really seems to be little to no movement." This sentiment reflects a broader uncertainty contrasting with the previously more optimistic views on Bitcoin ETF approval chances.
A pivotal meeting on March 8 between Coinbase, Grayscale, and the Securities and Exchange Commission (SEC) about converting Grayscale’s Ethereum Trust into an ETF did not yield the anticipated positive feedback, further dampening expectations. The absence of comments from the SEC on the issuers was particularly noted as a concerning sign.
Lack of Filing Changes
One key reason for the diminished outlook is the absence of filing changes for Ethereum ETF products, a procedural step observed before Bitcoin ETF approvals. Brian Rudick from GSR highlighted this lack of movement, suggesting it could lead to lowering their previously more optimistic approval odds.
Jake Chervinsky of Variant Fund also shared a skeptical view, pointing to political and strategic factors that might weigh against the approval odds. However, he suggested that upcoming weeks could provide more clarity on the SEC's stance.
Major investment banks, including JPMorgan and TD Cowen, have also expressed doubts about the likelihood of spot Ethereum ETFs securing approval by May, aligning with the broader industry's recalibrated expectations.
The changing sentiment among analysts underscores the complexities and uncertainties inherent in the regulatory approval process for cryptocurrency ETFs. As the May deadline draws nearer without clear indicators of progress, stakeholders remain vigilant, hoping for signs that could sway the SEC's decision-making process.
