Ethereum ETF Applications on Fast Track? SEC Action Boost Crypto Market Prices

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The cryptocurrency world is abuzz with excitement as the U.S. Securities and Exchange Commission (SEC) surprises everyone by nudging Nasdaq and CBOE to tweak their applications for spot Ethereum ETFs. This unexpected move has sparked speculation that the SEC might be gearing up to give these filings the green light.

SEC’s Surprise Move: Hinting at Approvals?

On Monday, the SEC caught many off guard by asking for adjustments to the 19b-4 filings for spot Ethereum ETFs. This directive has fueled rumors that the regulatory body could be moving towards approving these ETFs before critical deadlines. The first round of deadlines includes VanEck’s application due on May 23 and Ark Invest/21Shares’ on May 24.

Eleanor Terrett’s report sheds light on the urgency, stating,

“Hearing issuers/exchanges have until 10:30 AM today to update the 19b-4 filings. Looks like staking was a no-go based on Fidelity’s update. Also hearing there has been *some* engagement on S-1s but unclear how substantive.”

NEW: Hearing issuers/exchanges have until 10:30AM today to update the 19b-4 filings. Looks like staking was a no go based on Fidelity’s update. Also hearing there has been *some* engagement on S-1s but unclear how substantive. https://t.co/53P48bCrqj

— Eleanor Terrett (@EleanorTerrett) May 21, 2024

Market Response: Ether’s Surge

The SEC’s request for updates has already had a significant impact on the market, with Ether’s price shooting up by as much as 18% on Monday, followed by another 2.5% surge early Tuesday, peaking at $3,764. These price swings reflect growing optimism among investors about the potential approval of spot Ethereum ETFs.

According to Reuters,

“The U.S. securities regulator on Monday asked Nasdaq and CBOE to fine-tune their applications to list spot ether exchange-traded-funds (ETFs), signaling the agency may be poised to approve the filings, three people familiar with the process told Reuters.”

Politics in Play

The SEC’s move has left many surprised, especially given SEC Chairman Gary Gensler’s cautious approach to cryptocurrency. However, there appears to be a shift in the political landscape, as Jake Chervinsky suggests.

It's hard to believe this SEC would do us any favors like approving the spot ETH ETF.

But policy is politics, and crypto has been winning the political battle for months.

Maybe the Biden camp saw how many voters Trump could win with one pro-crypto comment and decided to pivot.

— Jake Chervinsky (@jchervinsky) May 21, 2024

Analyst Predictions

In the midst of speculation, Bloomberg analysts James Seyffart and Eric Balchunas have increased the odds of ETF approval from 25% to 75%, citing recent developments. They highlight three key factors: bipartisan opposition to the SEC’s previous stances, lack of prior engagement between exchanges and the SEC, and ARK’s recent removal of staking from their ETF filing.

Geoff Kendrick of Standard Chartered expresses strong confidence, estimating an 80% to 90% likelihood of SEC approval this week. He forecasts potential inflows of up to $45 billion for Ethereum in the first year post-ETF approval.

Kendrick also predicts significant price movements for Ethereum, projecting a year-end target of $8,000 and a 2025 projection of $14,000, linked to an expected Bitcoin price of $150,000 by the end of 2024 and $200,000 by the end of 2025.

Implications for the Crypto Market

The approval of spot Ethereum ETFs could bring about significant changes in the cryptocurrency landscape. It would signal a major endorsement of Ethereum by U.S. regulators, likely leading to strong inflows from both institutional and retail investors. With increased liquidity and legitimacy, Ethereum’s price is expected to rise, dragging other cryptocurrencies along with it.

Jesse Eckel aptly summarizes,

“Even if you don’t own any ETH you should care about this. Because when ETH goes up so will everything else. There will be a massive wealth effect that will spill into every corner of crypto. Solana, Avalanche, etc included. What’s good for ETH is good for all.”

Bullish or bearish on Ethereum’s future? Weigh in with your prediction!