All eyes are now on the eagerly awaited approval of spot Ethereum Exchange-Traded Funds (ETFs) in 2024. Following the green light for 11 spot Bitcoin ETFs on January 10, the path to Ethereum-based ETFs appears to be progressively clearer, with analysts suggesting a 70% chance of approval by May.
Interconnected Destinies of Bitcoin and Ethereum
ETF analyst Eric Balchunas from Bloomberg emphasizes the interconnected fate of spot Ethereum ETFs with their Bitcoin counterparts. According to Balchunas, Ethereum’s trajectory closely mirrors that of Bitcoin, and he confidently predicts that spot Ethereum ETFs are likely to secure approval, asserting that they “will be fine.”
New Deadline Sparks Speculation
The final decision on VanEck’s spot ETH ETF is slated for May 23, intensifying the anticipation within the cryptocurrency community.
SEC’s Meticulous Stance
Digital asset lawyer Joe Carlasare anticipates the approval of spot Ethereum ETFs in 2024, albeit with a note of caution. Carlasare suggests that the SEC will carefully establish a precedent that allows them discretion in determining which digital asset ETFs can enter the market. He explains that the SEC’s goal is to offer guidance discouraging a flood of ETF applications for every major token.
Balchunas maintains an optimistic outlook, estimating a 70% chance of spot Ethereum ETF approval by May, although he acknowledges the uncertainty surrounding the exact launch timing.
Ether’s Rally in Anticipation
The buzz around spot Ethereum ETFs has already influenced the price of Ether. Post the approval of spot Bitcoin ETFs, Ether experienced a surge of approximately 3%, surpassing $2500 for the first time since May 2022. At the time of writing, Ether is trading at $2533, reflecting a 7% increase in the past 24 hours.
Spot Ethereum ETF Trading Predictions
Carlasare adopts a more conservative approach, predicting that spot Ethereum ETFs may not commence trading until the third quarter of 2024. In contrast, Hashdex, one of the spot Ethereum ETF applicants, suggests that trading could kick off as early as the second quarter.
Steven McClurg, CIO of Valkyrie Funds, speculates on the entry of spot Ether and XRP ETFs into the market following Bitcoin’s approval.
A Robust Case for Ethereum
Bloomberg ETF analyst James Seyffart expresses confidence in the SEC’s approval of spot Ethereum ETFs. Seyffart highlights that by approving Ethereum futures ETFs, the SEC implicitly recognizes Ethereum as a commodity, a pivotal factor contributing to the likelihood of spot Ethereum ETF approval.
Several major players, including BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, and Hashdex, are actively seeking SEC approval for their spot Ethereum ETFs. The SEC faces critical decisions on these applications, spread across various deadlines from May to August.