The data provided by Coinbase suggests that there is a 30% to 40% chance of the SEC approving spot Ethereum ETFs by the end of the month. This information comes from an Institutional Research Analyst at Coinbase, David Han. Han believes that the correlation between CME futures products and spot exchange rates could play a role in the approval process for Ethereum ETFs. He also points out the price discount at which the Grayscale Ethereum Trust is currently trading.
One interesting point raised in the analysis is the impact of US politics on the SEC’s decision-making process. Han suggests that denying spot ETH ETFs could cost the SEC political capital, especially in light of the growing influence of crypto in US politics. Ryan Sean Adams, the founder of Bankless, echoes this sentiment by highlighting how Democrats may have changed their stance on crypto to align with their political interests.
Another crucial factor to consider is the composition of the SEC itself. With a majority of commissioners being Democrats, there is a certain expectation regarding their decision-making process. Han notes that the SEC does not need to approve all spot applications simultaneously, with different deadlines for each application. This raises the possibility of a staggered approach to approvals.
Han also speculates on the potential for legal challenges in case of a rejection. He references a past lawsuit from Grayscale regarding Bitcoin ETFs and suggests that a similar situation could arise for Ethereum ETFs. This adds a layer of complexity to the decision-making process for the SEC.
Eric Balchunas, a Bloomberg analyst, provides a contrasting view to Coinbase’s analysis. He considers Coinbase’s stance as a risky and potentially attention-grabbing move, highlighting the speculative nature of such predictions. Balchunas himself has put forth low estimates for the approval odds of spot ETH ETFs in the past, indicating a more cautious outlook compared to Coinbase.
The likelihood of the SEC approving spot Ethereum ETFs is still uncertain. The interplay between market dynamics, political considerations, and legal factors creates a complex landscape for decision-making. Stakeholders will need to closely monitor developments in the coming weeks to gauge the final outcome.
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