Odds of Spot Ethereum ETF Approval Plunge To 23%

The likelihood of a spot Ethereum exchange-traded fund (ETF) receiving approval from the U.S. Securities and Exchange Commission (SEC) by the end of May has significantly decreased, according to prediction markets and industry analysts.

Polymarket, a decentralized prediction market platform, currently estimates the chances of approval at 23%. This is a sharp decline from the 74% odds recorded on January 10, when spot Bitcoin ETFs were approved.

Key highlights:

• Prediction markets on Polymarket now estimate a 23% likelihood of spot Ethereum ETF approval by the end of May.
• The odds have dropped significantly from 74% on January 10, when spot Bitcoin ETFs were approved.
• The SEC has delayed decisions on ETH ETF applications from BlackRock and Fidelity.
• Two Democratic U.S. senators have urged SEC Chair Gensler not to approve future crypto products.

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Following the SEC’s approval of 11 spot Bitcoin ETFs in January, several asset managers, including BlackRock and Fidelity, have filed applications for spot ETH ETFs. However, the regulatory agency has recently delayed its decision on these applications, indicating that the possibility of such a financial product is not as imminent as initially thought.

Spot Ethereum ETF approval faces setbacks

The chances of a spot ETH ETF approval faced further setbacks this week when two Democratic U.S. senators, Laphonza Butler of California and Jack Reed of Rhode Island, urged SEC Chair Gary Gensler to restrict future crypto ETF applications. 

Bloomberg analysts have also revised their expectations for spot ETH ETF approval. Earlier this week, senior ETF analyst Eric Balchunas lowered his odds to 30%, down from 70% in January. 

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The shift in sentiment surrounding the approval of a spot ETH ETF can be attributed to the SEC’s recent actions and the concerns raised by U.S. senators. The regulatory agency appears to be taking a more cautious approach to approving crypto-related financial products, particularly those involving cryptocurrencies other than Bitcoin.