Will be approved this week

Ethereum prices received a significant 20% boost on May 20, according to media reports that the U.S. Securities and Exchange Commission (SEC) will soon approve an Ethereum spot traded fund (ETF).

On May 20, Bloomberg ETF analyst Eric Balchunas raised the probability of Ethereum spot ETF approval from 25% to 75%. His post on X received over a million views in an hour, leading to a massive increase in the price of Ethereum and a surge in other altcoin markets as well.

Bloomberg Analysts Predict Ethereum ETF Has a 75% Chance of Approval This Week

Eric Balchunas, a respected Bloomberg analyst in the cryptocurrency ETF space, recently updated his prediction for the likelihood of Ethereum spot ETF approval, raising it to 75%.

Balchunas was a prominent figure in the news coverage of the spot Bitcoin ETF launching in January 2024, and he shared his insights on X, immediately making waves in the cryptocurrency market. Within minutes of his post, the price of Ethereum surged by more than 10%.

Balchunas said he heard rumors “this afternoon that the SEC may do a 180-degree turn on the Ethereum spot ETF application.” The SEC has remained silent on the Ethereum ETF, and has been considering whether to classify ETH as a security or a commodity. Previously, this silence was interpreted as a negative signal that the ETF's chances of approval were slim.

However, the SEC is facing increasing pressure as deadlines for multiple ETF decisions approach on May 23 and 24. Balchunas referenced another tweet from crypto ETF expert Nate Geraci, explaining that the SEC must first approve 19b-4s (exchange rule changes) and S-1s (registration statements) in order for an ETF to launch. Grassi suggested that the SEC could approve 19b-4s first and then spend more time reviewing S-1s to allow for a more thorough review of the filings.

This strategic delay could be beneficial as it would give the SEC additional time to work through the complexities involved in approving these ETFs. Recently, ARK and 21Shares amended their applications to remove sponsored staking, which may make their proposals more attractive. While the removal of sponsored staking could be seen as a drawback, it could improve the chances of approval.

Balchunas’ revised view is notable because just a week ago he described the chances of an Ethereum spot ETF being approved as “slim.” His dramatic change in the likelihood of 75% suggests significant new information or insights.

If an Ethereum spot ETF is approved, it would be a major milestone in the popularity of the cryptocurrency, potentially opening the door to a wider range of investors and pushing Ethereum prices to new all-time highs above $4,900.

As shown in the chart above, Ethereum prices have risen 19% from $3,408 to $3,719 in the past 24 hours as investors reacted to Bloomberg analysts’ views on the prospects for Ethereum ETF approval. Having broken out of the upper Bollinger Band indicator, the bulls are now in control of Ethereum’s short-term price action.

However, strategic investors may be cautious about such rapid price increases. If the SEC issues formal approval later this week, it could trigger a wave of selling on the news, with short-term investors rushing to take profits and potentially causing a pullback to the $3,500 level.

The Ethereum ETF’s progress is similar to the approval process for a spot Bitcoin ETF, suggesting that approval may be imminent despite the SEC’s relative silence.

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