Updated on May 22, 2024: 5 Ethereum ETF issuers have modified their applications
Following the increase in the probability of the approval of Ethereum ETF by the U.S. Securities and Exchange Commission (SEC) from 25% to 75%, as predicted by market analysts, the cryptocurrency market has experienced another surge. Several financial institutions, including asset management companies Fidelity, Invesco, and ARK Invest, have made last-minute modifications to their Exchange Rule Change applications (19b-4s).
According to the report from “Cointelegraph,” Fidelity, Franklin Templeton, ARK 21Shares, and Grayscale have removed the provisions regarding Ethereum collateralization from their applications, while Grayscale has submitted updated application documents for Ethereum Mini Trust.
Bloomberg ETF analyst James Seyffart expressed excitement on X, stating, “It’s really happening,” and pointed out that all five amended filings were submitted within a half-hour timeframe between 1:35 PM and 2:00 PM Taiwan time on May 21.
However, Seyffart emphasized that even if the 19b-4 application filings are approved, the ETFs will still require a registration statement (S-1) before they can officially launch. Therefore, there is still a long way to go before the ETFs can be launched, but these filings submitted by the issuers prove that all the predictions are real.
Analysts’ sentiment takes a U-turn! Probability of Ethereum ETF approval increased by 75%
With only a few days left until the final review date for Ethereum ETF, experts and analysts in the market have generally had low expectations for its approval this month. As a result, the cryptocurrency market has shown moderate performance in the past week without significant fluctuations. However, on May 21, the price of Ether suddenly surged by over 18%, leading to a significant increase in the prices of other mainstream cryptocurrencies in the market.
Bloomberg senior analyst Eric Balchunas made a sudden turnaround prediction on X at 3 AM on May 21 and posted that the probability of Ethereum ETF approval has been raised from 25% to 75%, resulting in a surge in the price of Ether.
In his X tweet, Balchunas stated that he and another senior analyst, James Seyffart, heard some rumors in the afternoon: the U.S. Securities and Exchange Commission (SEC) might make a 180-degree turn on this increasingly politicized issue, so everyone is now making emergency preparations.
Seyffart also retweeted the tweet on X, stating that the approval situation for Ethereum ETF this week seems to be improving, and he heard this from multiple sources. However, Seyffart also emphasized that this prediction mainly applies to Vaneck’s 19b-4 rule (Exchange Rule Change) prediction on May 23, and a future application for S-1 (registration statement) will still be required.
In other words, it may still take several weeks to months to see the approval of S-1 and the actual launch of Ethereum ETF.
After multiple delays in the U.S. SEC’s decision on Ethereum ETF, May 23 is the final deadline for the initial Ethereum spot ETF application submitted by VanEck. If the SEC approves it, other institutions’ applications for Ethereum ETFs will also likely be approved, making it a crucial period for Ethereum ETF.
Further reading:
As the Final Countdown for Ethereum ETF Approaches, Will It Have a Chance of Approval? Experts: “This Timing” Is Crucial
In fact, on May 20, Nate Geraci, co-founder of ETFStore, posted on X, stating that the SEC may approve the Exchange Rule Change (19b-4) separately from the registration (S-1) for ETFs. For example, approving the Exchange Rule Change first but slowing down the execution speed of the S-1 application, “especially considering the SEC’s lack of proactive involvement.”
Considering the complexity and risks associated with Ethereum’s Proof of Stake (PoS) and cryptocurrency structure, this approach allows regulatory agencies more time to review these applications.
Cryptocurrency’s position becomes an important issue in the U.S. election
Although the SEC has not released any official statements at the moment, with the sudden reversal predictions from market analysts, Ether has not only surged but also driven the growth of other mainstream cryptocurrencies, including Bitcoin (BTC).
As of the time of writing, Bitcoin has risen by 6.43% in the past 24 hours, reclaiming the $70,000 level. Ether, on the other hand, has surged by 18.88% in the past 24 hours, surpassing $3,665 and reaching a new high in nearly two months.
In addition, Solana (SOL), Binance Coin (BNB), Toncoin (TON), and Dogecoin, among the top ten cryptocurrencies by market capitalization, have all seen an average increase of 5% in the past 24 hours.
The sudden reversal in analysts’ predictions for Ethereum ETF is likely due to the increasing importance of cryptocurrency issues in the U.S. election, making it more “politicized.”
Recently, the U.S. House of Representatives passed the 2023 U.S. Blockchain Act by a margin of 334 to 79, establishing a new policy framework and guidance for the development of blockchain technology. This bill aims to enhance the competitiveness of the United States in the blockchain field and has received strong support from the cryptocurrency community.
At the same time, some lawmakers have also proposed the “Blockchain Integrity Act” in hopes of imposing stricter regulations on cryptocurrencies. The tug-of-war between the two sides has made the cryptocurrency issue increasingly “political.”
Balchunas analyzed on X that political factors in this regard may bring about rapid changes. He added that cryptocurrencies seem to be becoming a more politicized issue leading up to the upcoming U.S. election. While he cannot be fully certain at the moment, the Biden administration may hope to adopt a less “tough” stance on cryptocurrency issues.
References:
Coindesk, Cointelegraph, Cointelegraph