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Bloomberg Analyst Predicts Spot Ethereum ETF Rejection in May
- Chances for the approval of Spot Ethereum ETFs are declining, with analysts citing a lack of engagement from regulators.
- Unlike their previous back-and-forth communication on Bitcoin ETFs, the SEC is signalling a stark difference in regulatory approach.
- At the same time, interest in Spot Bitcoin ETFs remains niche, primarily appealing to early adopters who are already interested in Bitcoin.
Odds for the approval of Spot Ethereum ETFs are tumbling, reveals an analyst close to the matter. Bloomberg analyst James Seyffart had previously assigned these ETFs (exchange-traded funds) a 35% chance of approval by May, which was already a downward revision.
Related: BlackRock Advances Tokenisation Efforts with Upcoming Fund Launch Via Ethereum
Now, the analyst believes the odds have worsened, as the United States Securities and Exchange Commission (SEC) has not been actively engaging with applicants. This contrasts with the situation for Spot Bitcoin ETFs, Seyffart says, which were approved in January and have since attracted significant interest.
Seyffart said the SEC went forth and back on BTC ETFs, and that is not happening with Ether ETF applications—leading the analyst to believe we won’t see the approval in May.
We now believe these will ultimately be denied on May 23rd for this round. The SEC hasn’t engaged with issuers on Ethereum specifics. Exact opposite of Bitcoin ETFs this fall.
James Seyffart Meanwhile, Seyffart posted on X (formerly Twitter) that applications by VanEck, Ark/21Shares, Hashdex & Grayscale are all likely to be delayed over the next fortnight.
Only Handful of Advisors Invest in ETFs
At the same time, Senior Bloomberg ETF Analyst Eric Balchunas said that interest in the Spot Bitcoin ETFs is still small. According to Balchunas current investments in Bitcoin are driven by clients who have a pre-existing interest in cryptocurrency, rather than being a broad-based recommendation from advisors to all their clients.
This ties out w[ith] what issuers telling me re Advisors’ clients: so far it’s only ones into btc already, they are “handful” of early adopters inquiring, then making allocations. Advisors are not yet soliciting the rest of their clients. All these flows are from inbound traffic.
Eric Balchunas Meanwhile in Europe and Canada, investors seem to have taken profits off the table amid the Bitcoin price correction. Following the launch of US Spot ETFs, Canadian, German and Swedish Spot Bitcoin ETFs saw outflows of several hundred million dollars.
The United States has been a late-comer to the ETF game, with funds available in many other jurisdictions including Australia, Brazil and Switzerland.
Related: World’s Largest Pension Fund Considers Bitcoin Investment
As the landscape for Spot Ethereum and Bitcoin ETFs evolves, underscored by regulatory challenges and focused investor interest, navigating these waters requires thorough research. For those looking to deepen their understanding, exploring crypto education platforms offers insights on how to analyse crypto investments before diving in.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
