Experts: Is there a chance for Ethereum ETF approval this year as the countdown to review begins?

Will the Ethereum ETF be approved?
The countdown has officially begun for the final decision by the US Securities and Exchange Commission (SEC) on the application for an Ethereum spot ETF. The SEC must make a final decision to approve or reject the institutional application for an Ethereum spot ETF by May 23rd, next week. The attitude of market experts and investors towards the SEC’s decision is highly anticipated, but many experts believe that the SEC is likely to reject the application for an Ethereum spot ETF in May. This is because, so far, the SEC has not given a clear answer to the core question of whether “Ethereum is a security.”
After submitting an application for an Ethereum spot ETF, there are four review deadlines (45 days, 45 days, 90 days, and 60 days). If the SEC does not make a decision on the first date, the application will be extended to the second deadline, until the final deadline, where the SEC must make a final decision to approve or reject.
May 23rd is the final deadline for VanEck, the institution that first submitted the application for an Ethereum spot ETF. If the SEC approves it, then other institutions’ applications for an Ethereum ETF will likely be approved as well, making it a crucial period for Ethereum ETFs.
Scott Johnson, a general partner at Van Buren Capital, extracted parts of the official documents on the social platform X and posted that the SEC’s review decision on the Ethereum spot ETF next week may not be optimistic.
Scott pointed out that the SEC is currently studying the security issues of Ethereum (ETH) in relation to the application. However, in the past review of Bitcoin spot or futures ETFs, the SEC has never mentioned this issue.
James Seyffart, a Bloomberg analyst, also retweeted Scott’s tweet and stated that this document indeed increases the possibility of the SEC classifying Ethereum as a security and rejecting the Ethereum spot ETF.
Further reading:
Ethereum faces “national” investigation! Will likely be classified as a security, with a slim chance of approving a spot ETF. What are the problems?
Eric Balchunas, another Bloomberg ETF analyst, recently predicted that the chances of the SEC approving an Ethereum spot ETF this month are very slim. This is because Ethereum currently lacks meaningful interaction with issuers, its attributes in regulatory judgments are still vague, and the recent investigation of the Ethereum Foundation by regulators seems to be quite unfavorable.
Experts: The US presidential election is the next key point
If the US SEC really rejects VanEck’s application in May, then the applications for an Ethereum spot ETF by other institutions such as ARK 21Shares, Hashdex, Invesco Galaxy, BlackRock, and Fidelity are also likely to be rejected. However, Jan van Eck, CEO of VanEck, is also highly skeptical that the US SEC will approve his application in May.
In addition, Grayscale withdrew its application for an Ethereum spot ETF on May 7th, before any explanation was given, which also sparked discussions in the community.
Although the chances of approving an Ethereum ETF this year are quite slim, most experts are still optimistic about its long-term future development.
The next key milestone is the US presidential election in November this year.
Currently, one of the presidential candidates, Trump, is leading in some opinion polls. Eric Balchunas pointed out that although Trump does not necessarily support cryptocurrencies, his former SEC chairman nominee, Jay Clayton, did not approve spot ETFs in the past. But given the current situation, Trump is still a more suitable presidential candidate for cryptocurrencies and spot ETFs.
Assuming a new chairman is appointed in the US in April or May next year, and institutions immediately submit applications afterwards, the final deadline for the SEC’s decision on these applications would be around December 2025.
If a Democratic candidate, Joe Biden, who has a stricter attitude towards cryptocurrencies, wins, based on the observation of the application cycle for Bitcoin spot ETFs in the past, after being rejected, there is usually a one-year cooling-off period where no institutions take any action. After waiting for some time, they will gradually resubmit their applications.
Therefore, Eric Balchunas speculates that issuers will first use this summer to heal and adjust their mood, and then see what new opportunities the election will bring.
References:
cointelegraph, Decrypt, DL News