Ethereum ETF approval odds jump from 25% to 75% – What changed?

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    ETH ETF approval odds jumped from 25% to 75% after the recent SEC update.
    The market rallied, but 100% ETF approval is not guaranteed unless S-1s are approved, too. 

As a researcher with experience in the crypto market, I believe that the recent update from the US Securities and Exchange Commission (SEC) on Ethereum [ETH] ETF approval has significantly increased the odds of approval from 25% to 75%. The SEC’s request for updated 19b-4 forms from exchanges indicates an intention to approve these rule changes, which are essential for launching a new ETF product.

As a researcher, I’ve noticed an unexpected shift in the US Securities and Exchange Commission’s (SEC) stance on Ethereum [ETH] ETFs. This change has led Bloomberg analysts to raise their approval odds estimation from a mere 25% to a significant 75%.

As a researcher looking into the recent events surrounding exchange-traded funds (ETFs), I’ve come across an intriguing perspective from Bloomberg ETF analyst Eric Balchunas. He believes that the political aspect of the approval process played a significant role in the Securities and Exchange Commission’s (SEC) decision.

Revised: @JSeyff and I have raised our estimation of Ether ETF approval chances to 75% (previously at 25%). Reports indicate that the SEC might be reconsidering its stance on this contentious issue, leading to a flurry of activity from all involved parties.

According to reports, the Securities and Exchange Commission (SEC) is reportedly requesting that exchanges expedite the process of updating their 19b-4 filings. Many market observers take this as a sign of impending approval.

SEC’s update on Ethereum ETF approval

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For those new to the subject, an ETF (Exchange-Traded Fund) can be made available for purchase by the American public following the approval of two forms – the 19b-4 and S-1 – from the Securities and Exchange Commission (SEC).

As a researcher studying the securities exchange industry, I would describe it this way: When introducing a new product on platforms such as the NYSE or Nasdaq, exchanges submit the required forms, specifically the 19b-4 forms also known as Exchange Rule Changes, to the Securities and Exchange Commission (SEC) for approval.

Potential issuers, such as asset managers including BlackRock and VanEck, file S-1 forms, which are likewise referred to as “Registration Statements.” These documents provide details about the proposed ETF products, including their structural framework, management, and operational aspects.

The exchange rule changes (19b-4s) significantly increased the likelihood of ETF approval from 25% to 75%.

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According to Balchunas, the SEC requested updated 19b-4s from exchanges by the morning on 21st May.

As a researcher, I’ve uncovered new information regarding the SEC’s request for revised 19b-4s. They’ve asked for these revisions to be resubmitted by 10 am tomorrow for potential approval as early as Wednesday.

Ethereum ETF approval and its impact

At the time of writing, the Polymarket prediction market showed a significant shift following the development, with approval odds rising from a mere 10% to a noteworthy 59%.

As a crypto investor, I observed a noticeable shift in market sentiment that was reflected in Ethereum’s price charts. ETH surged by more than 19%, breaking the $3.7K resistance and effectively erasing my April losses. This bullish momentum extended beyond Ethereum, positively impacting other altcoins such as Ethereum Classic (ETC).

ETC experienced a significant surge, rising by 17% from $28 to $32.9. This shift in price marked a change in market sentiment, making the outlook for ETC bullish. As the ETC halving event looms closer (May 31st), Ethereum’s update may trigger an impressive upward trend for ETC.

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Based on information from Coinglass, it was the short sellers of Ethereum with leverage who experienced significant losses as a result of the recent update, with approximately $79 million in short positions getting liquidated within the last 12 hours.

To clarify, it’s important to mention that the recent SEC update primarily affected the 19b-4s and not the S-1s. Nate Geraci of ETF Store anticipates that this update may expedite the approval process for 19b-4s, but the implementation of changes in S-1s is expected to be a more gradual progression.

As an analyst, I can suggest that from a technical standpoint, the Securities and Exchange Commission (SEC) could grant 19b-4 approvals and subsequently delay the filing and approval process for S-1s. Given the reported disengagement in this matter, such a sequence is a possibility.

If the 19b-4 applications are given the green light, the ETH ETF’s final approval process might be lengthy. Nonetheless, some market observers believe that approval is only a matter of time. However, the staking feature, which remains undecided at this juncture, poses a challenge.

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2024-05-21 14:16