Updated on May 22, 2024: 5 Ethereum ETF issuers have made amendments to their applications.
Following the increase in the probability of the approval of Ethereum ETF by the U.S. Securities and Exchange Commission (SEC) from 25% to 75%, as predicted by market analysts, the cryptocurrency market has experienced another significant surge. Several financial institutions, including asset management companies Fidelity, Invesco, and ARK Invest, who have submitted applications, have made last-minute modifications to their exchange rule change (19b-4) applications.
According to the report by international media outlet Cointelegraph, Fidelity, Franklin Templeton, and ARK 21Shares have removed the provisions regarding Ethereum collateralization from their applications, and Grayscale has submitted updated application documents for Ethereum Mini Trust.
Bloomberg ETF analyst James Seyffart expressed his excitement on Twitter, stating, “It’s really happening,” and pointed out that all five amended files were submitted within a half-hour timeframe between 1:35 PM and 2:00 PM Taiwan time.
However, Seyffart emphasized that even if the 19b-4 application is approved, the ETF would still require a registration statement (S-1) to be officially launched. Therefore, there is still a long way to go before the ETF can be officially launched, but the documents submitted by these issuers prove that all the predictions are real.
Analysts’ Attitudes Shift: Probability of Ethereum ETF Approval Increased by 75%
With only a few days left until the final review date for the Ethereum ETF, experts and analysts in the market were generally pessimistic about its approval this month. As a result, the cryptocurrency market has remained moderate with no significant fluctuations in the past week. However, on May 21, the price of Ethereum suddenly surged by over 18%, leading to a sharp increase in the prices of other major cryptocurrencies in the market.
Bloomberg senior analyst Eric Balchunas made a sudden turnaround in his prediction on Twitter in the early morning of May 21, raising the probability of Ethereum ETF approval from 25% to 75%, which also caused a surge in the price of Ethereum.
Balchunas stated in his tweet on Twitter that he and another senior analyst James Seyffart heard some rumors in the afternoon that the SEC might make a 180-degree turn on this increasingly politicized issue. Consequently, everyone is now preparing for an emergency response.
Seyffart also retweeted the tweet on Twitter, suggesting that the approval of the Ethereum ETF this week seems to be improving and mentioned that it was information from multiple sources. However, Seyffart emphasized that this prediction primarily focuses on VanEck’s forecast for the May 23 19b-4 rule change (exchange rule change), and a future S-1 (registration statement) application would still be required.
In other words, it may take several weeks to months to see the approval of S-1 and the actual launch of the Ethereum ETF.
SEC’s decision on the Ethereum ETF has become a critical period for Ethereum ETF applications by other institutions if it is approved on May 23, which is the deadline for VanEck, the first institution to submit an Ethereum spot ETF application. Therefore, it is widely regarded as a crucial period for Ethereum ETF.
Further reading:
Will Ethereum ETF be approved this year? Experts say “this timing” is crucial
In fact, on May 20, Nate Geraci, co-founder of ETFStore, posted on Twitter that the SEC might approve the exchange rule change (19b-4) separately from the registration (S-1) of the ETF. For example, they might approve the exchange rule change first but slow down the execution of the S-1 application, “especially considering the SEC’s lack of active involvement.”
This approach allows regulatory agencies more time to review these applications, given the complexity and risks associated with Ethereum’s Proof of Stake (PoS) and cryptocurrency structure.
Cryptocurrency Becomes an Important Issue in the U.S. Election
Although the SEC has not officially released any formal news at the moment, the sudden reversal in the predictions by market analysts, along with the surge in the price of Ethereum, has also led to the growth of other mainstream cryptocurrencies, including Bitcoin (BTC).
As of the time of writing, Bitcoin has increased by 6.43% in the past 24 hours, reaching $70,000 again. Meanwhile, Ethereum has surged by 18.88% in the past 24 hours, surpassing $3,665 and hitting a new high in nearly two months.
Additionally, Solana (SOL), Binance Coin (BNB), Toncoin (TON), and Dogecoin, among the top ten cryptocurrencies by market capitalization, have also experienced an average increase of 5% in the past 24 hours.
According to analyst Balchunas on Twitter, the sudden change in the prediction regarding the Ethereum ETF is likely due to the increasing importance of cryptocurrency issues in the U.S. election, making it more “politically charged.”
Recently, the U.S. House of Representatives passed the 2023 U.S. Blockchain Act with a margin of 334 to 79 votes, establishing a new policy framework and guidance for the development of blockchain technology. This bill aims to enhance the competitiveness of the United States in the blockchain field and has received strong support from the cryptocurrency community.
At the same time, there are lawmakers who have proposed the Blockchain Integrity Act, hoping to impose stricter controls on cryptocurrencies. The tug-of-war between the two factions has made cryptocurrency issues increasingly “political.”
Balchunas analyzed on Twitter that political factors in this regard could bring about rapid changes. He added that as the U.S. election approaches, cryptocurrency seems to be becoming a more politicized issue. Although he cannot be completely certain at the moment, the Biden administration may seek a less “hardline” stance on cryptocurrency issues.
References:
Coindesk, Cointelegraph, Cointelegraph
