Ethereum Will Skyrocket! SEC Ready to Approve Spot ETFs This Week?

Bittime - Bloomberg analyst Eric Balchunas is optimistic about the chances of Ethereum Spot ETF by the SEC. This news shocked the crypto market and triggered a surge in ETH prices. This article discusses recent developments, deadline pressures, and the potential impact of ETF approval.

Optimism Strengthens, Ethereum Rejoices

The crypto world was filled with joy on Monday, May 20, 2024. Eric Balchunas, a famous ETF analyst from Bloomberg, caused a stir in the virtual world with his tweet. He raised his Ethereum Spot ETF approval prediction from 25% to 75%. This tweet immediately went viral, being seen by more than one million users in less than an hour.

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Balchunas is known as a trusted expert in the crypto ETF space. He previously contributed to the news about the launch of the Bitcoin Spot ETF in January 2024. Not surprisingly, his latest tweet triggered a shock wave in the crypto market. The price of Ethereum (ETH) immediately shot up more than 10% in just a matter of minutes.

SEC Changed Its Mind?

Balchunas's optimism stemmed from "strong rumors" he heard that afternoon. He indicated the possibility of "the SEC reversing course" regarding the application for an Ethereum Spot ETF. Over the past few months, the SEC has tended to remain silent regarding Ethereum ETFs. Their focus is on the classification of ETH, whether this crypto asset is classified as a security or commodity. This silence from the SEC is often interpreted negatively for the chances of Ethereum Spot ETF approval.

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Final ETF Application Deadline Heats Up

However, the situation changed drastically. With the final deadline for some ETF applications falling on May 23 and 24, 2024, the SEC is pressed for a decision. This pressure becomes stronger as the deadline approaches.

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SEC Strategy: Half and Half?

To add context to Balchunas' tweet, it is worth looking at another tweet from crypto ETF expert, Nate Geraci. Geraci alluded to the ETF approval process involving two main stages: 19b-4 (change in exchange rules) and S-1 (registration statement). The SEC could technically approve the 19b-4 first, then “delay” approval of the S-1. This delay, according to Geraci, could occur because the SEC takes longer to research the merits of an ETF application.

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This "halfway" option seems reasonable. The reason is that the SEC's internal debate regarding crypto ETFs has so far been quite tough. Approving 19b-4 could be a first step to give the SEC time to conduct a more thorough assessment of the S-1, especially in terms of regulatory compliance.

Efforts to Increase Chances of SEC Approval

A positive trend can also be seen from the steps taken by ARK and 21Shares, which have recently revised their application by removing the staking element. This decision was likely taken to increase the attractiveness of their ETFs in the eyes of the SEC. Although eliminating staking harms investors in terms of potential returns, this step can increase the chances of SEC approval.

SEC Shift in Attitude?

Balchunas' optimism is surprising. Just a week earlier, he stated that the chances of an Ethereum Spot ETF approval were “very slim.” The increase in predictions to 75% indicates a significant shift in attitudes.

Parallel to Spot Bitcoin ETF Approval?

The Ethereum Spot ETF approval situation bears some similarities to the Bitcoin Spot ETF process. The SEC also tends to be quiet in the moments leading up to Bitcoin Spot ETF approval. Despite the fundamental differences, these similarities give hope that the SEC could approve an Ethereum Spot ETF this week, despite the lack of official information released.

Big Impact on Crypto Adoption

If approved, the Ethereum Spot ETF would be a milestone for crypto adoption. This instrument will open the gates for new investors to access ETH tokens and potentially push its price to record highs above $4,900.

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Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.

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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.