Ethereum prices experienced a significant surge of 20% on May 20th following reports from the media suggesting that the US Securities and Exchange Commission (SEC) is on the verge of approving ETH spot ETFs.
On that day, Eric Balchunas, an ETF analyst at Bloomberg, increased the likelihood of a spot Ethereum ETF approval from 25% to 75%. His post on the social media platform ‘X’ garnered over a million views within an hour, leading to a substantial increase in ETH prices and a surge in the wider altcoin market.
Eric Balchunas, a well-respected analyst in the crypto ETF space at Bloomberg, recently revised his prediction, raising the probability of a spot Ethereum ETF approval to 75%.
Balchunas, who played a prominent role in the news coverage of spot Bitcoin ETFs launched in January 2024, shared his insights on ‘X’, causing immediate ripples throughout the crypto markets. Within minutes of his post, ETH prices spiked by over 10%.
Balchunas mentioned hearing “chatter this afternoon that SEC could be doing a 180 on” spot Ethereum ETF applications. The SEC, which has remained mostly silent on Ethereum ETFs, has been deliberating whether to categorize ETH as a security or a commodity. This silence had previously been interpreted as a negative indication for ETF approval prospects.
However, with multiple ETF decisions approaching on May 23rd and 24th, the SEC is under increasing pressure to take action. Balchunas referred to a tweet from Nate Geraci, a crypto ETF expert, who explained that the SEC must approve both the 19b-4s (exchange rule changes) and S-1s (registration statements) for ETFs to launch. Geraci suggested that the SEC could approve the 19b-4s first and then take more time to scrutinize the S-1s, allowing for a more thorough review of the applications.
This strategic delay could be advantageous as it would give the SEC additional time to address the complexities involved in approving these ETFs. Recently, ARK and 21Shares amended their application to remove staking, potentially making their proposal more appealing to the SEC. Although the removal of staking could be seen as a drawback, it could improve the chances of approval.
Balchunas’ revised outlook is significant considering that just a week ago, he considered the odds of a spot ETH ETF approval to be “slim to none.” His drastic shift to a 75% likelihood indicates that he has received substantial new information or insights.
The approval of a spot Ethereum ETF would be a major milestone for crypto adoption, potentially opening the door for a wider range of investors and driving ETH to new all-time highs above $4,900.
As shown in the chart above, the price of Ethereum surged by 19% within the last 24 hours, rising from $3,408 to $3,719, as investors reacted to the insights provided by the Bloomberg analyst regarding the prospects of Ethereum ETF approval. With the breach of the upper-limit Bollinger band indicator, bulls are now firmly in control of ETH’s short-term price action.
However, strategic investors will approach this rapid price surge with caution. If the SEC officially approves the ETF later this week, it could trigger a sell-the-news wave among swing traders looking to make quick profits, potentially causing a retracement towards the $3,500 level.
The path of Ethereum ETFs mirrors the approval process of spot Bitcoin ETFs, suggesting that despite the SEC’s relative silence, approval could be imminent.
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