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After months of idling, Ethereum's price has soared the most in 18 months, fuelled by glimmers of hope from the Securities and Exchange Commission (SEC) for the potential approval of ETH ETFs.
Yesterday, the SEC asked ETF exchanges to update 19b-4 filings. A 19b-4 form is used to notify the SEC of a proposed rule change that would enable the fund to be traded on exchanges.
This doesn't guarantee approval as ETF issuers must obtain approval for both this filing and an S-1 registration statement from the SEC before the products can officially launch.
Nonetheless, Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart increased their odds of ETH ETF approval to 75% from 25% following the update.
"@JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See Nate's tweet below for probably order of events (but again we capping at 75% until we see more, eg filing updates)," tweeted Balchunas.
"A quick note, @EricBalchunas and increased odds to 75% for spot #Ethereum ETF approvals. But that's for the 19b-4 May 23rd deadline (@vaneck_us's deadline) We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live Eth ETF h/t @NateGeraci," Seyffart added.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
A quick note, @EricBalchunas and increased odds to 75% for spot #Ethereum ETF approvals. But that's for the 19b-4 May 23rd deadline (@vaneck_us's deadline) We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live Eth ETF h/t @NateGeraci
— James Seyffart (@JSeyff) May 20, 2024
Other analysts on social media “are now speculating that the SEC might be more likely to lean towards potential approval, and traders are now scrambling to put on positions since many had completely written off even the remote possibility of an approval”, said Chris Newhouse, a decentralised-finance analyst at Cumberland Labs.
“Massive spikes in volume and demand for both spot and leveraged positions are apparent in the markets and the outperformance in ETH compared to BTC points to the potential ETH ETF catalyst as a primary driver.”
Following the news, Ethereum jumped from the low $3,000 range to over $3,000, marking a 24% increase over the last five days.
Having already delayed its decision from January to March to May, the SEC extended its decision-making time period earlier this month to 5 July 2024.
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