Are Ethereum ETFs Approved by the SEC? Yes—but don’t bet on it

Now that the US Securities and Exchange Commission has approved eight Ethereum ETFs, another crypto battle has erupted over what “verified” means.

That's the argument on Polymarket, at least, that the SEC will approve the Ethereum ETF position on May 31 after betting more than $13 million.

Open betting went live on January 9, pending SEC approval for the first Bitcoin ETFs. A fundamental question that raises any potential adoption of the Ethereum ETF is whether Ethereum is a security or a commodity – and whether Bitcoin has paved the way for Ethereum to follow.

Financial analysts and crypto-analysts regularly weigh in on their predictions, which are becoming increasingly pessimistic with the SEC's actions against other crypto projects. As the May deadline for a decision tightens, some suggest the delay is a good thing. Last month, JP Morgan put the chance of approval at 50%.

But the sentiment began to change last week: Coinbase predicted that an Ethereum ETF would become a reality last week, and when two Bloomberg ETF analysts revised their probability from 25% to 75% on Monday, the price of ETH began to rise. .

Polymarket contenders were also watching closely. The odds of SEC approval rose from 13% to 50% on the site on Monday. When the SEC announced Thursday that it had approved applications for spot Ethereum ETFs, bullish investors rejoiced. Surely the answer to whether an Ethereum ETF will be approved before May 31st is “yes”?

Not so fast, many argued.

Twitter user Observer wrote: “Too bad they didn't disclose the terms of the real bet, which was $11 million on the game.” I checked this afternoon and thought, ‘This doesn't even explain what the EFF approval means… it's going to end in a big fight.'

Technically, the SEC has approved rule changes that allow major investment firms such as Grayscale, BlackRock, Fidelity and VanEck to continue offering Ethereum ETFs and enhanced plans. But those special funds have yet to be approved, a process that could take more than a week — and it's well past Polymarket's May 31 deadline.

Some 1,000 comments were posted on the event page, with some calling the bet “rigged.”

“Let's be honest: A lot of people were overconfident that the SEC would deny it, and now they're crying that the SEC turned around and threatened them,” wrote a Polymarket user. “ETH ETF Approved… [by] Credible Reporting Agreement”

Another Polymarket user suggested that “the best solution is to make a 50/50 split and make it clear that the rules are not enough to choose a clear winner.”

On the other hand, the wording of the SEC's decision was clear: “This order approves the proposals submitted on an expedited basis.”

“For all of you who don't have stocks and are salty, bring The Law of the Market and Polymarket Decisions to any SAT/GMAT verbal professor and see what they say. Hint: Everyone agrees with Polymarket because it's basic reading comprehension.” wrote a Polymarket user.

Polymarket users were given a chance to dispute the outcome of the bet, but at 8:18 pm ET, the yes vote was solidified. For many, the simplest answer was always the best answer.

Polymarket investor Nick Tomeno tweeted: “I am an investor in Polymarket and a general forecast market enthusiast, so have no influence on the final solution here. But in my opinion, for the long-term success of a prediction market platform, it is important to address the spirit of the market. If not, the majority will not believe him.

With big bets, the broader crypto market simply continues. Although up nearly 30 percent for the week, it has risen to $3,937 on the day and at the time of writing, the price of Ethereum has barely budged, trading at $3,819.

In the year Launched in 2020, Polymarket is a blockchain-based prediction market platform that allows users to hold tokens and get results on current events such as elections, sports and current events. Earlier this month, Polymarket announced that it had raised $70 million from funding participants, including Ethereum founder Vitalik Buterin.

Edited by Ryan Ozawa.