Ethereum ETF Decision Approaches: What Will Happen to ETH Prices?

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As the final deadline for the first spot Ethereum ETF draws near, market watchers are eagerly anticipating the SEC’s decision. With VanEck’s application is set to approve or deny on May 23, followed by Ark 21Shares on May 24. 

This decision will likely set the tone for other issuers like Hashdex, Grayscale, Invesco Galaxy, BlackRock, and Fidelity, who are awaiting their verdicts.

Approval Odds Not Looking Good

Nate Geraci, President of ETF Store, pointed out on May 20 that for ETFs to launch, the SEC must approve both the 19b-4s (exchange rule changes) and the S-1s (registration statements). He noted that while it’s “technically possible” for the SEC to approve the 19b-4s and then delay the S-1s, there has been a lack of engagement with issuers.

SEC decision deadline this week on spot eth ETFs…
 
SEC must approve both the 19b-4s (exchange rule changes) & S-1s (registration statements) for ETFs to launch.
 
Technically possible for SEC to approve 19b-4s & then slow play S-1s (esp given reported lack of engagement here).

— Nate Geraci (@NateGeraci) May 19, 2024

The 19b-4 is a filing by a national securities exchange, like the NYSE or Nasdaq, to change rules or introduce new products, such as spot ETH ETFs. Meanwhile, the S-1 is an initial registration form providing detailed information about the company’s business operations and products.

Industry observer “Gronky” on X explained that the SEC could use delay tactics to further evaluate market conditions or the specific structures of these ETFs without outright denying the 

The SEC (Securities and Exchange Commission) is reviewing applications for Ethereum-based Exchange-Traded Funds (ETFs), which are a type of investment fund that holds assets like stocks, commodities, or in this case, cryptocurrency, and trades on stock exchanges similar to…

— Gronky.ETH (@QeYcc) May 19, 2024

The Vote!!!

Just five SEC Commissioners will vote on whether to approve or deny VanEck’s ETF. Gary Gensler, who voted in favor of approving spot Bitcoin ETFs in January, is among them. 

The other four are crypto-friendly Commissioners Hester Pierce and Mark Uyeda and anti-crypto Commissioners Caroline Crenshaw and Jaime Lizárraga. This lineup suggests that Gensler’s vote could once again be the deciding factor.

What If the ETH ETF is Approved?

If the SEC approves the VanEck fund on Wednesday, ETH prices are expected to surge in the short term. However, most analysts believe a rejection is more likely. One analyst mentioned that the Ethereum bottom is already in, and spot ETFs will eventually be approved even if denied this week.

$ETH monster run incoming?

Ethereum ETF decision on the 23rd May.

I expect it to get rejected

BUT I think the $ETH bottom is already in
Ethereum will get an ETF and the market knows it.

We are going to see a crazy run in Ethereum in the coming months as $BTC halving is… pic.twitter.com/gzzq3Xbr68

— Dippy.eth (@dippy_eth) May 19, 2024

Analyst “Mister Crypto” noted that the bearish rejection scenario is already priced in, a sentiment echoed by other traders and analysts. A surprise approval, however, could catch the market off guard.

ETH Price Analysis

Recently, Ethereum hit a new yearly low against Bitcoin (0.044 BTC) on May 16, but it has recovered about 6% since then. Despite this, sentiment remains bearish due to the impending ETF decision. 

As of now, ETH prices are slightly down, trading just under $3,111. An SEC approval could drive prices up quickly to the resistance level of $3,500 and potentially higher.

Also Check Out: Will Spot Ethereum ETFs Get the Green Light? A Deep Dive Into the Approval Process