Approval for Ethereum ETFs Coming Soon? Key Challenges You Should Know

In the wake of the recent green signal for 11 spot Bitcoin ETFs, all eyes are now on the potential approval of a spot Ethereum ETF. The burning question on everyone’s minds is whether Ethereum will follow suit.

The journey towards approval, however, is riddled with challenges, primarily stemming from the Securities and Exchange Commission’s (SEC) unclear stance on how to classify Ethereum. The SEC is yet to make a definitive decision on whether Ethereum (ETH) falls within the purview of a security, creating a regulatory gray area that complicates the ETF approval process.

Staying Optimistic Regardless

Despite these regulatory hurdles, some optimists find solace in recent victories. Grayscale’s Court of Appeals triumph and the green light for the Ethereum Futures ETF are seen as positive indicators. Optimists believe that an Ethereum ETF approval is imminent.

In the event of a potential SEC rejection in May, there is an anticipation of an appeal, with hopes that the SEC might reconsider to avoid complications.

Read More: BlackRock’s Ethereum ETF: March 10th Deadline Could Be Make-or-Break!

So, What are the Odds of Approval?

Market experts offer varied perspectives on the likelihood of an Ethereum ETF approval. Brett Tejpaul, Coinbase Institutional’s head, acknowledges growing interest but points out the SEC’s reluctance to definitively label Ethereum as a security as a potential roadblock.

Eric Balchunas remains optimistic, assigning a 70% chance for approval, while James Seyffart adopts a more cautious estimate of 60-65%. Both experts weigh the positive and negative aspects, expressing relatively better odds for Ethereum compared to other cryptocurrencies.

Bitwise’s Confidence

Bitwise, a company entrenched in Bitcoin ETFs, shares optimism about an Ethereum ETF. They highlight the necessary ingredients, including a robust market for Ethereum futures. However, the acknowledgment of Ethereum’s complexity compared to Bitcoin introduces an element of uncertainty regarding the approval timeline.

Staying Cautious is Key!

Skeptics argue that the SEC’s historical delays in approving cryptocurrency matters cast doubt on a swift approval for an Ethereum ETF. Given Ethereum’s unique position, not fitting the traditional investment mold, gaining approval becomes a challenging feat.

Also Read: JP Morgan Says Spot Ethereum ETFs Approval Is Next – With 50% Chances  

JPMorgan analysts echo this skepticism, emphasizing the uncertainty surrounding the SEC’s treatment of Ethereum as a regular commodity for the upcoming May approval. Adding a note of caution, investment bank TD Cowen suggests that the SEC might prefer observing the performance of Bitcoin ETFs before making decisions on other cryptocurrencies.