Why do you think an Ethereum ETF will be approved soon?

Bloomberg’s ETF analyst suddenly and unexpectedly raised the odds of a spot Ethereum ETF approval from 25% to 75%!

Key points:

• Reversal of Decision: Eric Balchunas, senior ETF analyst at Bloomberg, claims that the SEC suddenly reversed its decision to reject the spot ETH ETF, causing issuers to scramble to complete their applications before the first final decision deadline on May 23.

• Political Motivations: While the Biden administration has taken an aggressive anti-cryptocurrency policy stance in recent weeks, Balchunas pointed to the growing politicization of cryptocurrency as a driving factor behind this sudden shift.

• Market shock: Market sentiment was clearly negative on the chances of an Ethereum spot ETF being approved — with Polymarket’s market implied odds showing just an 11% chance of approval this morning — but now the probability is above 50% for the first time since January as the ETH/BTC ratio rebounds strongly.

The author's opinion:

Although Balchunas said political pressure forced the SEC to yield to its denial stance, approval of an Ethereum ETF appears inevitable within a few months.

ETF experts have previously hailed the lack of meaningful communication between the SEC and proposed issuers as a red flag indicating denial, but when the regulator approved an Ethereum ETF product based on commodity futures last October, the decision to approve the spot product may have already been made, solidifying Ethereum’s status as a non-security.

As experts are once again confident about approval, crypto market participants agree that an Ethereum ETF is likely to be approved this Thursday.