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The U.S. Securities and Exchange Commission (SEC) has requested that exchanges update their filings for spot Ethereum (ETH) exchange-traded funds (ETFs) by submitting new Form 19b-4 on an “accelerated basis.”
This move, according to Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart, suggests that the SEC may be leaning towards approving the Ethereum ETF applications by the upcoming Thursday deadline. If approved, this would mark the issuance of the second spot digital asset ETF in the United States.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
Prior to the updated Form 19b-4 request, Balchunas and Seyffart had estimated the odds of Ethereum ETF approval at 25%. However, following the SEC’s request, they have significantly increased their prediction to 75%. Despite the optimism among some in the crypto community, Balchunas believes that the approval expectations are merely “wishcasting.”
The next steps
For the ETFs to launch, the SEC must approve both the 19b-4s for exchange rule changes and the S-1s for registration statements, according to Nate Geraci, president of The ETF Store. The potential approval of spot Ethereum ETFs could signal a significant shift in U.S. crypto policy.
Variant Fund Chief Legal Officer Jake Chervinsky stated that an approval would be a “true shock” to those closely involved in the process in Washington, D.C. He added that the approval could indicate a major change in U.S. crypto policy following the SAB 121 vote, which may be even more significant than the ETF itself.
If the spot ETH ETF is approved, it will be a true shock to everyone I know in DC who's close to this process.
That doesn't mean it won't happen.
It means approval could signal a major shift in US crypto policy after the SAB 121 vote, perhaps more important than the ETF itself. https://t.co/ru0iD0GJIC
— Jake Chervinsky (@jchervinsky) May 20, 2024
Seyffart agreed with Chervinsky’s assessment, noting that during a recent Blockchain Summit in D.C., nearly everyone he spoke to believed the ETFs would be denied. If the ETFs are approved, it could portray the Biden administration as more crypto-friendly. The approval in the United States would also follow the launch of such a product in Hong Kong in early May.
This is the correct take. I was literally in DC last week for @PerianneDC's Blockchain Summit and almost every single person i spoke to said that it was going to be denied. Only one person thought it would be approved out of like 30+.
— James Seyffart (@JSeyff) May 20, 2024
Ethereum’s price increased by over 21% to its current price of nearly $3,800 on the back of the news.
