Spot Ethereum ETF Approval Looks Bleak

• Odds that the SEC will approve an Ethereum spot ETF are extremely low, an ETF analyst at Bloomberg says after previously giving the approval a 35% chance in May.
• Ethereum’s price has dipped 20% in the past week and is now trading just above $3,200, but a price rally today has sparked optimism that it can recapture the $4,000 level.

The US Securities and Exchange Commission is unlikely to approve a spot ETF for Ethereum this year, a top ETF analyst has stated amid a price drop for the world’s largest altcoin.

For most of last year, the crypto world focused on the spot ETF approval for Bitcoin. When it finally happened in January, the focus shifted to Ethereum, the next most likely candidate. Analysts predicted that the Ether ETF could be approved in May, as Crypto News Flash reported. Others pointed out that the SEC needed some time to assess the market, which would likely be next year.

However, according to James Seyffart, an ETF analyst for Bloomberg Intelligence, the SEC is unlikely to give the green light this year. He stated on X:

Bloomberg analyst James Seyffart said that the possibility of spot Ethereum ETF being approved in May has become increasingly slim, and this round is expected to be eventually rejected on May 23 because U.S. regulators seem to lack cooperation with Potential issuers such as…

— Wu Blockchain (@WuBlockchain) March 20, 2024

Previously, the Bloomberg Intelligence team claimed that there was a 35% chance that the SEC would approve the Ether ETF in May.

“I get all the reasons they SHOULD approve it (and we personally believe they should), but all the signs/sources that were making us bullish 2.5mo out for the BTC spot are not there this time,” analyst Eric Balchunas stated a week ago.

No Ether ETF This Year

May 23 is the all-important date for Ethereum. The SEC has previously postponed its decision deadline on an ETH ETF, but on May 23, it will have to reveal which way it’s leaning.

The US regulator is currently considering seven applications from Galaxy Digital, 21Shares, Grayscale, Invesco and Hashdex, the same companies that received approval for BTC ETFs earlier this year. The current market leaders, BlackRock and Fidelity, also submitted their applications and await the SEC’s decision in May.

The Bloomberg team isn’t the first to warn that an Ether ETF is unlikely this year. A week ago, renowned crypto lawyer Jake Chervisnky took to X to share his doubts, saying that even if an Ether product had all the merits, the SEC “dislikes crypto as a concept, sees no value in the technology, and thinks attacking it is politically advantageous.”

He added:

…as of now appears to be making little effort to work on the details necessary for approval and listing, instead seeming to focus on diligence re: correlation, perhaps to build up its basis for denial.

Meanwhile, Ethereum has shed 19.80% in the past week to trade at $3,240 today as it lost the momentum that took it to a two-year high above $4,000.