CRYPTO: Optimism over crypto assets has returned ahead of the US SEC's first final decision on the Ethereum spot price ETF, due on Thursday.

Bitcoin surpassed $70,000 again this week, but it is Ethereum that has taken the lead in terms of its recent performance after lagging all year (see chart).

An approval of the Ethereum ETF in the world's largest capital market is a long shot, but hopes are rising. Even an SEC rejection could come with a path to an eventual green light and be significant in the development and institutionalization of what remains one of the newest, smallest, and most retail-dominated asset classes.

This decision is the latest in a series of major crypto catalysts coming this year.

DEADLINE: Thursday, May 23 is the first final deadline for the SEC to decide whether to approve the Ethereum Spot Price ETF, issuing its ruling on VanEck's proposal, similar to what it did with the Bitcoin ETFs in January, an approval that has driven net inflows of $12 billion since then and helped make bitcoin one of the best-performing assets this year.

Expectations are lower for an approval of these vehicles over ETH due to 1) it being too soon after the approval of the bitcoin ETF, 2) with less legal pressure to do so than with Bitcoin, and 3) with regulatory interpretation of commodity versus more complicated security.

But this would make any price reaction to an unlikely ETF approval likely more dramatic.

PROXIES: There are fewer direct proxies for Ethereum than for Bitcoin, since this crypto asset does not have an equivalent to MicroStrategy or Bitcoin miners.

Grayscale Ethereum Trust's discount to net asset value is the clearest sentiment proxy. It has dropped sharply from a low of -55% last July to a still discounted -12% today. The US-listed Proshares Ethereum ETF is the first to fully invest in ETH futures traded on the CME.

Canada's Ether Capital is a small company focused on Ethereum staking and owns 46,000 ETH. Ethereum's risk/reward ratio has deteriorated ahead of the SEC decision with the latest rally, but any SEC path to approval would be welcomed.

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