Increased ETF approval odds push Ethereum up by 17%
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has experienced a significant surge of 17% following news of a higher likelihood of its exchange-traded fund (ETF) being approved by the U.S. Securities and Exchange Commission (SEC).
On May 20, the price of Ethereum rose sharply and is currently trading at $3,658, with a 24-hour market volume of $37 billion. This surge came after Eric Balchunas, a senior analyst at Bloomberg, increased the probability of an Ethereum ETF approval from 25% to 75%.
Balchunas suggested that the SEC’s increased pace in approving the ETF may be due to political pressure, as their previous stance showed little involvement with ETF applicants. He also mentioned that the SEC is reportedly urging exchanges like the NYSE and Nasdaq to revise their filings, although there has been no official confirmation from the regulator.
Nate Geraci, co-founder of the ETF Institute and president of the ETF Store, stated that the final decision on the registration requirement for individual funds (S-1) is still pending. Geraci explained that the SEC could potentially accept the exchange rule amendments (19b-4s) separately from the fund’s registration (S-1), which might cause a delay beyond VanEck’s Ethereum spot ETF request deadline of May 23.
This potential delay would give the regulator more time to thoroughly evaluate and approve these documents, considering the complexities and risks associated with Proof-of-Stake (PoS) cryptocurrency systems.
The SEC has already been investigating whether ether, the primary native asset of the Ethereum blockchain, should be classified as a security. This formal investigation started after the network transitioned from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) mechanism.
If the SEC determines that ether is indeed a security, it may reject the applications for spot ether ETFs.
Furthermore, analysts at QCP Capital believe that the current lack of interest in the market, coupled with the potential approval of a spot Ethereum ETF, could trigger a short squeeze. This could easily push the price of ETH back to its recent highs of March 12, when it was trading at $4,066, according to data from CoinMarketCap.
In related news, ARK and 21Shares have removed the staking feature from their Ethereum ETF plans, which has led to speculation and uncertainty in the market once again.
Overall, the news of a higher probability of an Ethereum ETF approval has had a significant impact on the market, with the price of ETH surging and investors anticipating further developments in the coming days.
