Crypto investors hoping for a spot Ether ETF approval by May will likely be disappointed. Crypto market maker GSR has significantly lowered its estimate of the likelihood of this happening, bringing it down to just 20%. This is a sharp drop from their previous prediction of a 75% chance in January.
The GSR analyst, Brian Rudick, attributed the change in outlook to several factors. Firstly, there seems to be minimal engagement from the Securities and Exchange Commission (SEC) on the matter. Additionally, the SEC is reportedly facing some political pressure not to approve more digital asset ETFs. Finally, the ongoing investigation into whether Ether is classified as a security by the SEC is believed to be a major hurdle.
Expected Timeline and Issuer Strategies
The similarities between the conditions leading up to the approval of spot Bitcoin ETFs and the potential approval of spot Ether ETFs were initially seen as a positive sign. However, the lack of progress and the new factors mentioned above have led GSR to believe the approval process will likely be much longer and could involve litigation. As a result, they are now forecasting a potential approval timeframe of 2025-2026.
Further complicating the situation is the recent amendment of ETF applications by several issuers to include Ether staking. While this could make the ETF more attractive to investors, Rudick questions the timing considering the already uncertain approval landscape. He speculates that this move could be a way to pressure the SEC into a response or to lay groundwork for future staking options if a May approval falls through.
Also Read: Will the SEC Greenlight Ether ETFs? VanEck Application Delayed, Public Can Now Weigh In
GSR’s revised outlook is not an isolated case. Bloomberg ETF analysts have also lowered their estimates for a May approval to 30%, down from their previous estimates of 60-70%. The lack of movement from the SEC and the approaching deadline are fueling pessimism among analysts.
The future of spot Ether ETFs remains unclear. While approval is still technically possible in May, it appears increasingly unlikely. Investors should keep a close eye on developments from the SEC and adjust their strategies accordingly.
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