Crypto exchange Coinbase The odds are that SEC approval of a spot is unlikely Ethereum The ETFs are expected to be 30%-40% by the end the month.
It is not a May 15 David Han, Coinbase Institutional Research Analyst, stated that the SEC approved spot Bitcoin ETFs due to its ability to provide investors with a diversified portfolio of Bitcoin. — Correlation between CME futures and exchange rate spot — It could also result in the approval of spot Ethereum ETFs.
Han said that there was “room for surprise to the upside on this decision,” Both on the prediction markets as well as in Grayscale Ethereum Trust trading at a discount of 24%.
He acknowledged that SEC silence had caused “uncertainty” It is unlikely that ETFs for ETH that are designed to be used to stake ETH will gain approval.
Political factors are possible.
Coinbase has a positive outlook in part due to crypto’s important role in US political life. Han claimed that the SEC is going to spend political capital on denying ETFs for spot ETH. Coinbase thinks this strategy will be uncertain.
Ryan Sean Adams, the founder of Bankless, shared this sentiment. He said that he did not expect approval until Democrats took office. “caught wind their anti-crypto SEC chair could lose them an election.”
No one has described any particular political development. However, recent surveys show that Crypto users slightly prefer Trump to Biden. Uniswap founder Hayden Adams has described Crypto as an alternative to Biden’s approach in terms of regulation.
SEC chair Gensler, two of the voting commissioners, and another two are Republicans. This gives SEC both a Democratic majority and leadership.
The approval process could take a while
Han stated that SEC did not have to approve each spot application at the same time.
ETH ETF applications for different spots have different deadlines. VanEck must be decided by the SEC first, but BlackRock and Fidelity can wait until August to decide.
Han also said that the rejection of 23 May could result in legal actions that would reverse the decision.
Gary Gensler, the SEC chairman in January, cited a Grayscale lawsuit over the conversion proposal of GBTC to justify the approval by the SEC of Bitcoin spot ETFs. Grayscale however has not announced that they will be filing a similar suit around spot Ethereum ETFs.
Bloomberg’s Balchunas responds
Bloomberg Analyst Eric Balchunas Commented on Coinbase’s optimistic and contrarian stance by writing:
“It’s like a way out of the money call option to give themselves notoriety if off chance it happens. No harm if they wrong. Risk-free PR move.”
The predictions of his own and those of colleagues were not taken into consideration. “braver and riskier reputationally than… [last minute random] contrarian calls.”
Balchunas gave a very low estimate of the likelihood that spot ETH ETFs would be approved on 14 May. “slim to none.” He predicted that he would be back in late March. “very pessimistic” 25% approval odds.
Similar low estimates are also provided by crowd-sourced estimations. Polymarket’s odds of being approved at the moment of this writing were 10%. This is down from the 16% that Coinbase reported.
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Source: cryptoslate.com