Ethereum price skyrockets amid spot ETF approval speculation

Ethereum's price surged to a two-month high of $3,700 as analysts significantly increased the likelihood of U.S. approval for spot Ethereum ETFs amidst potential political pressure on the SEC.

By Ahmed Azzam | @3zzamous | 21 May 2024

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Ethereum ETF
  • ETH price surged to a two-month high of $3,700

  • Eric Balchunas of Bloomberg raised the approval odds from 25% to 75%

  • Biden administration possibly seeks to appear more crypto-friendly

After weeks of skepticism, leading Bloomberg ETF analysts now view the possibility of U.S. approval for spot Ethereum ETFs as significantly more likely. Ethereum's price surged to a two-month high of $3,700 today, following this shift in sentiment among analysts.

On May 20, Ether (ETH) saw an 18% increase after Eric Balchunas, a senior analyst at Bloomberg, raised the approval odds for the Ethereum exchange-traded fund (ETF) from 25% to 75%. Balchunas pointed out that the U.S. Securities and Exchange Commission (SEC) appears to be facing political pressure, as their prior stance showed limited engagement with ETF applicants.

Balchunas also mentioned that the SEC is reportedly requesting exchanges like the NYSE and Nasdaq to update their filings, though there has been no official confirmation from the regulator. Meanwhile, Nate Geraci, co-founder of the ETF Institute and president of the ETF Store, emphasized that the final decision on the registration requirement for individual funds (S-1s) is still pending.

Geraci explained that the SEC could approve the exchange rule changes (19b-4s) independently of the fund's registration (S-1), potentially extending the May 23 deadline for VanEck's Ethereum spot ETF request. This would provide the regulator additional time to thoroughly review and approve these documents, given the complexities and risks associated with Proof-of-Stake (PoS) cryptocurrencies.

"If [spot Ether ETFs] are denied, that's a story that would just go on and on," Balchunas said, highlighting the significant attention spot Bitcoin exchange-traded funds have been receiving. He added that a denial of spot Ether ETFs, similar to the Biden administration's potential veto of a bill overturning the SEC's establishment of certain accounting standards for firms that custody crypto, could alienate some voters.

The evolving landscape suggests that the U.S. government might be aiming to project a more crypto-friendly stance, possibly influencing the SEC's decision-making process regarding Ethereum ETFs.

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