- Analysts believe that spot Ethereum ETFs have a clear path to approval in 2024.
- Bloomberg ETF analyst Eric Balchunas estimates a 70% chance of approval by May, with the SEC having previously approved spot Bitcoin ETFs.
The Path to Spot Ethereum ETF Approval
In the world of cryptocurrency investments, the spotlight is now on the anticipated approval of spot Ethereum Exchange-Traded Funds (ETFs) in 2024. With 11 spot Bitcoin ETFs receiving approval on January 10, the path seems clearer for Ethereum-based ETFs, with one analyst suggesting a 70% chance of approval by May.
Alright, that’s enough of spot bitcoin ETFs…
Wen spot ether ETFs?
— Nate Geraci (@NateGeraci) January 10, 2024
Inseparable Fate of Bitcoin and Ethereum
Eric Balchunas, an ETF analyst at Bloomberg, believes that the approval of spot Ethereum ETFs is closely tied to the fate of spot Bitcoin ETFs. He emphasizes the interdependence of these two leading cryptocurrencies, stating that Ethereum‘s path follows closely behind Bitcoin’s. Balchunas even suggests that spot Ethereum ETFs “will be fine” and are likely to receive approval.
New deadline to obsess over just dropped
May 23rd is the final deadline for decision on VanEck’s spot ETH ETF pic.twitter.com/dgi5EVbPeQ
— Will (@WClementeIII) January 10, 2024
The SEC’s Precise Approach
On the legal front, digital asset lawyer Joe Carlasare anticipates the approval of spot Ethereum ETFs in 2024, albeit with some caution. He believes that the SEC will meticulously craft a precedent that allows them to retain discretion in determining which digital asset ETFs can enter the market. Carlasare explains that the SEC aims to provide guidance discouraging applicants from filing ETFs for every major token.
Balchunas offers a more optimistic perspective, estimating a 70% chance of spot Ethereum ETF approval by May. However, he notes that the exact timing of the ETFs’ launch remains uncertain.
Ether’s Price Surge
The anticipation surrounding spot Ethereum ETFs has already had an impact on the price of Ether. Following the approvals of spot Bitcoin ETFs, the price of Ether surged by approximately 3%, reaching over $2500 for the first time since May 2022. As of the time of publication, Ether is trading at $2533, marking a 7% increase in the past 24 hours.
Timing of Spot Ethereum ETF Trading
Carlasare predicts that spot Ethereum ETFs won’t commence trading until the third quarter of 2024, taking a more conservative approach. In contrast, one of the spot Ethereum ETF applicants, Hashdex, suggests that trading could begin as early as the second quarter.
Steven McClurg, CIO of Valkyrie Funds, previously expressed that he wouldn’t be surprised to see spot Ether and XRP ETFs enter the market following Bitcoin’s approval.
A Strong Case for Ethereum
James Seyffart, another Bloomberg ETF analyst, is confident in the SEC’s approval of spot Ethereum ETFs. He points out that by approving Ethereum futures ETFs, the SEC implicitly accepted Ethereum as a commodity, a significant factor that contributes to the likelihood of spot Ethereum ETF approval.
Several prominent organizations, including BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, and Hashdex, are vying for SEC approval for their spot Ethereum ETFs. The SEC must make decisions on these applications by various deadlines ranging from May to August.