The crypto market has once again witnessed an overnight bullish rally.
After multiple delays in decisions regarding the Ethereum ETF by the SEC, the final deadlines for approval of several spot Ethereum ETFs are expected between May 23 and 30, 2024.
If the SEC does not approve the spot Ethereum ETFs this time, the next opportunity will be a month later, on June 23.
VanEck, ARK, and Hashdex will need to resubmit their applications for spot Ethereum ETFs. However, a significant shift occurred on May 20, 2024.
Impact on Ethereum Prices
According to a report from CoinDesk, sources revealed that the SEC asked exchanges to update their 19b-4 filings for spot Ethereum ETFs on Monday. The 19b-4 form is used to notify the SEC of rule changes that allow a fund to be traded on an exchange.
This suggests that the SEC might approve these applications before the critical deadline this Thursday (May 23). However, this does not guarantee that the ETFs will be approved. Potential issuers also need to obtain S-1 filing approval before the products can begin trading. An insider mentioned that the SEC could take an indefinite amount of time to approve the S-1 filings since there is no set deadline.
Meanwhile, Bloomberg Intelligence ETF analyst Eric Balchunas indicated that the chances of spot Ethereum ETF approval have increased to 75% (up from 25%). He mentioned hearing that the SEC might make a 180-degree turn due to increasing political issues. Balchunas noted that the growing politicization of cryptocurrency is a driving factor behind this sudden shift.
Additionally, a source stated that a company currently negotiating with the SEC felt that the commission was delaying a few weeks ago but now believes it is on the right track for approval.
Ethereum Price Movement
In response to this news, Ethereum’s price surged overnight to over $3,700, with a 24-hour gain exceeding 20%.
The ETH/BTC ratio also mirrored this trend. A few days ago, ETH/BTC fell below 0.045, causing the community to question ETH’s performance in this bull market.
Stimulated by the significant rise in Ethereum, related tokens within the Ethereum ecosystem also saw substantial gains. The narrative around low circulation/high FDV VC tokens, which the crypto community was focused on yesterday, was quickly overshadowed.
Analyst Predictions and SEC Approval Odds
Before the rumors of the SEC’s 180-degree change in stance on spot Ethereum ETFs, analysts had already suggested that the likelihood of approval was underestimated. David Han, an institutional research analyst at Coinbase, stated in a May 15 report that the probability of the SEC approving a spot Ethereum ETF by the end of May was between 30% and 40%. While the market generally believed that U.S. authorities would not approve it in the short term, the potential for approval was still undervalued.
Reactions from Crypto Institutions
Crypto institutions also weighed in on the SEC’s potential change in attitude toward spot Ethereum ETFs.
Alex Thorn, Head of Research at Galaxy Digital, mentioned that if the rumors of the SEC’s 180-degree turn are true, they might find a balance where ETH itself is not considered a security, but staked ETH is.
Jake Chervinsky, Chief Legal Officer at Variant Fund, tweeted that if a spot Ethereum ETF is approved, it would shock everyone closely involved in the process in Washington. He suggested that such approval, especially following the SAB 121 vote, could signify a major shift in U.S. cryptocurrency policy, potentially more significant than the ETF approval itself.
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