US financial regulator Securities and Exchange Commission (SEC) is taking steps towards its decision on a Spot Ethereum (ETH) Exchange-Traded Fund (ETF) by calling for public comments on three applications.
A recent filing shows the SEC called interested parties to comment on the Fidelity Ethereum Fund, Grayscale Ethereum Trust and Bitwise Ethereum Trust. The SEC had previously asked public commenters to explain if they agree with Fidelity, BlackRock, Cboe and Nasdaq that arguments made in favor of the recently approved spot Bitcoin ETFs support Ethereum ETF.
While Bloomberg’s ETF analyst, Eric Balchunas, places the odds of a Spot Ethereum ETF at a pessimistic 25%, the SEC has taken necessary steps and called for public comment on three applications, according to a filing dated April 2, 2024.
Re Eth ETF approval, we are holding the line at 25% odds altho tbh it is a very pessimistic 25%. The lack of engagement seems to be purposeful vs procrastination. No positive signs/intel anywhere you look. Personally hope they do approve it but it just ain't looking good. https://t.co/nuBdCDE18L
— Eric Balchunas (@EricBalchunas) March 25, 2024
Ethereum holders' sentiment has likely dampened as analysts share dismal odds of an approval by May 2024. Crypto expert Vijay Boyapati critiques the need for a product like a Spot ETH ETF and argues that owners are unlikely to get staking yield on their Ethereum holdings and this makes it less attractive for investors.
One of the big disadvantages of Ethereum ETFs (which seem very unlikely to be approved) is that owners are unlikely to get staking yield.
— Vijay Boyapati (@real_vijay) April 2, 2024
And if you don't get that yield, your holdings are essentially being inflated away relative to everyone else who does.
In a recent interview with Forbes Crypto, Bitwise CIO Matt Hougan said that the asset management industry is too focused on Bitcoin, with the upcoming halving event. This takes away the necessary attention needed by an Ethereum ETF product to thrive.
Polymarket, a decentralized prediction market platform, places the odds of an Ethereum ETF approval by May 31 at 19% on Wednesday. Odds have consistently declined throughout March 2024.
Ethereum ETF approval odds on Polymarket
At the time of writing, ETH price is $3,304, up nearly 1% on the day.