Why is the current ETH market poor? What impact will the Ethereum ETF resolution have?
The probability that the U.S. Securities and Exchange Commission (SEC) will approve a spot Ethereum ETF by the end of May doubled from last week, rising from 7% to 14%, but this probability has steadily declined throughout 2024 and remains at a depressed level compared to the peak of 76% at the beginning of this year.
The document released by the U.S. Securities and Exchange Commission (SEC) stated that the agency "is providing notice of the reasons for disapproval under consideration: While this document is included in every request for comment on a spot Ethereum ETF, it is worth noting that this provision is absent from all spot Bitcoin ETF filings, indicating that the SEC may reject spot Ethereum ETFs on the grounds that they are improperly filed as commodity-based trust shares because they actually hold securities, which may be evidenced by the information received from the subpoena.
Market participants overwhelmingly expect the SEC to review VanEck's application on May 23. The first final decision deadline of the SEC will reject spot Ethereum ETFs; however, given that the agency has previously approved commodity futures ETFs, it is difficult to see how the SEC can justify not listing these products in the absence of new information provided by the subpoena. Note that the regulator approved an ETF based on ETH commodity futures last October.
This decision comes after Ethereum's transition to PoS, indicating that the SEC has abandoned jurisdiction over the asset and consolidated its status as a commodity, as these instruments would be illegal (and therefore not tradeable) if the underlying asset was a security.
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