The U.S. Securities and Exchange Commission (SEC) is expected to make a final decision on at least one Ethereum ETF application on May 23, but multiple fund companies believe that the SEC will reject the approval.
(Previous briefing:
Bloomberg analyst: The chance of approving the Ethereum ETF next week is very slim, the turning point is at the end of the year
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(Background supplement:
What will happen if the SEC rejects the Ethereum ETF? JPMorgan: It may face legal challenges and is likely to lose the case
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Table of Contents:
Multiple fund companies expect the Ethereum ETF to be rejected
Coinbase is expected to have a 30% to 40% chance of approval
Bloomberg analyst: This is Coinbase’s public relations strategy
The market is closely watching the decision of the U.S. Securities and Exchange Commission (SEC) on at least one Ethereum ETF application on May 23rd, whether it will be approved or rejected.
If approved, it may replicate the situation of Bitcoin ETF, stimulating the rise in the price of Ethereum. (Note: May 23rd is the final deadline for VanEck’s application)
However, Bloomberg reported today (May 18) citing insiders that some fund companies expect to be rejected because their contact with the SEC is not as frequent as before the approval of the Bitcoin ETF in January.
At that time, in the final weeks before the approval of the Bitcoin ETF, fund companies submitted multiple versions of amended documents to meet the requirements of the SEC, which paved the way for their approval. In contrast, the interaction between the Ethereum ETF and the SEC is much less.
Katherine Dowling, General Counsel of Bitwise, who applied for the Ethereum ETF in March, said that it is widely expected to receive a rejection decision:
Further reading:
SEC is in a hurry! 13 Bitcoin ETF merchants need to complete modifications “before the end of the year”, BlackRock and three others have submitted
In addition, Coinbase, the largest exchange in the United States, also believes that there is only a 30% to 40% chance of the SEC approving the Ethereum ETF at the end of this month. However, its analyst David Han pointed out in the “Ethereum Outlook” report on the 15th that there is still a key factor that may prompt the SEC’s approval, which is the correlation between CME futures products and spot rates.
The report stated:
Han further stated that if this correlation analysis is valid, the remaining reasons for disapproval may stem from the inherent differences between Ethereum and Bitcoin, such as scale, depth, and most importantly, differences in consensus mechanisms.
Han admitted that the SEC’s silence has caused market “uncertainty” and it is unlikely that Ethereum ETF supported by staking will be approved in the short term.
Further reading:
Fidelity applies to increase “staking” service for Ethereum ETF to create more income! Lido and RocketPool surged on the news
Another reason why Han is optimistic is that as cryptocurrencies gradually become election issues, he believes that it is uncertain whether the SEC is willing to use its political capital to refuse the launch of the Ethereum ETF.
However, he emphasized that even if the first deadline on May 23rd is rejected, he still believes that issuers have a high possibility of overturning this decision through litigation; in addition, he pointed out that not all Ethereum ETF applications need to be approved at the same time.
Bloomberg analyst Eric Balchunas responded to Coinbase’s analysis:
Balchunas also released a lower estimate on May 14, stating that the likelihood of approving the Ethereum ETF was “negligible”.
Related reports:
Michael Saylor: SEC will classify ETH as a security this summer, rejecting the Ethereum ETF
Standard Chartered Bank: The probability of approving the Ethereum ETF is low, but ETH is expected to reach $8,000 by the end of the year, and the SEC further postpones the decision to June
Financial lawyer predicts that the Ethereum ETF will be rejected by the SEC next month! ETH/BTC ratio hits a 3-year low.