The chances of an Ethereum Exchange-Traded Fund (ETF) receiving approval by the end of May have significantly decreased, according to data from Polymarket, a prediction platform. This decline is in stark contrast to the optimism that surrounded Bitcoin ETFs earlier this year.
Polymarket’s findings reveal a sharp drop in the likelihood of a spot Ethereum ETF approval, plummeting to just 28%. This is in stark contrast to the optimistic 74% probability predicted on January 10, when the approval of spot Bitcoin ETFs set a positive precedent.
In January, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs, sparking speculation about the potential approval of spot Ethereum ETFs. Major asset managers, including BlackRock and Fidelity, quickly filed identical applications in anticipation of a similar regulatory green light.
However, recent developments have seen the SEC delay its decision on BlackRock and Fidelity’s spot Ethereum ETF applications. This delay has left market participants and observers wondering about the agency’s position on expanding ETF offerings beyond Bitcoin.
Analysts at Ryze Labs have provided insights into the potential factors influencing the SEC’s approach. They suggest that SEC Chairman Gary Gensler’s limited authority over spot Bitcoin ETFs may give the agency more leeway in rejecting future non-Bitcoin ETF applications.
The analysts at Ryze Labs speculate that Gensler’s legacy may be characterized by a cautious approach to approving multiple cryptocurrency ETFs. They believe that Gensler, mindful of his position as SEC Chair, may be hesitant to accelerate the adoption of the crypto asset class by approving various ETF offerings.
The declining probability of a spot Ethereum ETF approval has significant implications for investors and the wider cryptocurrency market. Investors who had planned to diversify their portfolios with Ethereum exposure through ETFs may need to reconsider their strategies due to regulatory uncertainties.
The news of the decreasing probability of a spot Ethereum ETF approval has had an impact on the cryptocurrency market, causing fluctuations in investor sentiment. Some investors may become more cautious, while others may see the regulatory obstacles as temporary challenges in the long-term trajectory of cryptocurrency adoption.
