Sources revealed that the U.S. Securities and Exchange Commission (SEC) has asked Ethereum ETF spot applicants to update their 19-b4 filing documents, a move that has boosted market optimism about potential approval.

Bloomberg ETF analyst Eric Balchunas said on May 20 that the SEC may change its original position and no longer reject existing applications. He quoted ETF Store President Nate Geraci as saying that the SEC could approve the 19-b4 exchange listing rule while delaying the decision on the S-1 registration statement.

James Seyffart added that he and Balchunas have heard from multiple sources that more new applications will be submitted in the coming days.

Fox Business reporter Eleanor Terret’s sources also confirmed that the SEC has asked issuers to update their 19b-4 filings. She previously said the matter was “evolving in real time.”

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Bloomberg raises probability of approval to 75%

Balchunas and Seyffart raised the odds of an Ethereum spot ETF being approved to 75% from a previous 25%-30%. Balchunas also noted that this has become an "increasingly political issue" and that the topic has been widely discussed over the past week.

On May 15, Coinbase research analyst David Han said:

The U.S. election year could affect the SEC’s decision. At the time, Balchunas called Han’s statement a “risk-free PR move” and said his own predictions posed a greater risk to his reputation.

Bankless founder Ryan Sean Adams agreed that political factors before and after the release of the Coinbase report may have influenced the approval process, and he supported Balchunas' statement today. He responded:

Such is the impact of political pressure in an election year. Some commentators remain pessimistic. Ron Hammond, director of government relations at the Blockchain Association, said on May 20 that many people believe the SEC will reject applications based on political indicators and comments from issuers.

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Tight first deadline

The first deadline is approaching. The SEC must make a decision on VanEck’s spot ETH ETF proposal by May 23, but it may make decisions on multiple applications at the same time.

Prediction market Polymarket currently suggests there is a 10% chance that an Ethereum spot ETF will be approved by the end of May based on bets backed by the cryptocurrency.

The latest development coincides with a sudden surge in the price of ETH, which is up 20% in 24 hours, with most of the gains occurring in the two hours following Balchunas’ announcement. The cryptocurrency market is up 6.7% in 24 hours, while Bitcoin is up 5.2%.