Ethereum (ETH) Price Surges Amidst Renewed Speculation of ETF Approval

Bloomberg ETF analysts Eric Balchunas and James Seyffart have significantly increased their odds of spot Ethereum exchange-traded fund (ETF) approval in the United States from 25% to 75%.

This news has sent shockwaves through the cryptocurrency market, with Ethereum’s price surging by 8-11% to reach around $3,400.

TLDR

• Bloomberg ETF analysts Eric Balchunas and James Seyffart have increased the odds of spot Ethereum ETF approval in the US from 25% to 75%.
• The analysts cite potential political issues and background noise from the SEC as reasons for their updated prediction.
• The first deadline for ETF approval is on May 23 for VanEck’s Ethereum ETF filing, followed by deadlines for ARK21 Shares and Hashdex Nasdaq Ethereum ETFs.
• The news of increased approval odds led to an 8-11% surge in Ethereum’s price, reaching around $3,400, and a significant increase in liquidated short positions.
• The potential approval of spot Ethereum ETFs could signal a shift in US crypto policy and may be influenced by the upcoming presidential election.

The analysts cited potential political issues and background noise from the Securities and Exchange Commission (SEC) as the primary reasons behind their updated prediction.

Balchunas stated that the SEC could be “doing a 180” on the ETF approval issue, which he believes is becoming increasingly political. The industry consensus prior to this announcement was that the ETFs would likely be denied due to a lack of engagement between ETF issuers and the SEC.

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

The first deadline for ETF approval is rapidly approaching, with VanEck’s Ethereum ETF filing set for May 23. This will be followed by deadlines for ARK21 Shares Ethereum ETF on May 24 and Hashdex Nasdaq Ethereum ETF on May 30.

The approval of these ETFs could signal a major shift in US crypto policy, particularly in light of the recent bipartisan SAB 121 vote.

Things are taking a turn for the better on Spot #ethereum ETF approvals this week. Upping our odds to 75%. https://t.co/3WJ8kx9d8k

— James Seyffart (@JSeyff) May 20, 2024

The sudden increase in approval odds has had a significant impact on the cryptocurrency market. In addition to Ethereum’s price surge, nearly $150 million in short positions were liquidated in crypto derivatives over the past 24 hours, with $35.3 million related to positions shorting ETH.

The approval of spot Ethereum ETFs would be a shocking development for many in the industry, as the SEC’s stance on cryptocurrencies has been a topic of much debate.

Some speculate that the potential shift in the SEC’s position could be influenced by the upcoming presidential election.

President Joe Biden’s administration may be seeking to appear more crypto-friendly, particularly in light of former President Donald Trump’s recent statements positioning himself as a candidate who will be friendlier to the crypto industry.

The approval of spot Ethereum ETFs could open the doors for further institutional investment and mainstream adoption of cryptocurrencies.

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