SEC radio silence on Ethereum ETF ‘not a good sign’ – Bloomberg analyst

From the Securities and Exchange Commission to issuer disputes surrounding Ether (ETH) exchange-traded funds (ETFs), May could be a bad sign for those hoping for Ether ETF approvals.

Bloomberg ETF analyst Eric Balchunas told Cointelegraph that there were more than a few factors that have now lowered the probability of Ether ETF approval to 35%.

The main thing is that we are 73 days from the deadline and there is no communication or comment from the SEC to the suppliers. This is not a good sign,” said Balchunas.

“SEC has to make comments and issuers have to work to correct them. They may have to re-examine and may even need two meetings – it's a long process,” Balchunas said.

He also said he had “good intel” to suggest that the SEC's silence may have given financiers deliberate treatment.

Balchunas said SEC Chairman Gary Gensler's stance on Ether may also play a role, arguing that Gensler still thinks of Ether as a security and may be unwilling to endure another round of the “political fallout” the space received following the adoption of Bitcoin ETFs. and SEC court bankruptcy in August 2023 to Grayscale.

“I feel like he's thrown the industry a bone. He crowed with the loss of the court, and from his perspective, it's like, ‘OK, you've got to be fed up now.'

“At the end of the day, Gensler thinks Ether is a security. He doesn't want to approve unless he thinks it's a commodity like Bitcoin. All these little things add up.

He felt something.

Balchunas told Ether that the ETF process feels like the “reverse” of what he experienced during the Bitcoin ETF race.

While he admits this is a personal judgment or “sixth sense,” it's not a big part of the calculus behind ETF approval, but it's an important guiding factor.

“This has a different feel than the Bitcoin ETF competition. Our source, the actual public document, or our gut instinct, all sort of grew and became more corrupt. Everything is positively fed. And our chances naturally increased. This seems counterintuitive.

In a March 11 post to X, ETF Store President Nate Geraci described it as odd that the SEC approved multiple ETH futures ETF products in October and spot products in May, adding that there is little explanation as to why this would happen. matter

Meanwhile, Matt Korva, general counsel at Consensus, said in a March 11 post that a ban on X ETFs could be a positive development in the long term.

“If ETH goes away, they will be destroyed by their political regulators and have no arbitrary ground to fight against other coins – that's a very good thing,” Korva said.

RELATED: Ethereum (ETH) price hits $4,000 for first time since 2021

On March 6, crypto exchange giant Coinbase and asset manager Grayscale met with SEC officials to discuss a rule change to start selling funds on the Ether exchange.

While many crypto industry experts see this as a positive sign for Ethereum ETF approval, Balchunas sees a “robust” research paper from VB Capital General Partner Scott Johnson as a good explanation as to why this may not happen.

Johnson pointed out that the meeting was not between prospective funders and was mostly focused on analyzing the future prices of ETH and BTC compared to the spot.

The correlation analysis could be used as a reason to approve or deny the ETF, although denial seems more likely to Johnson — something Balchunas agreed with.

If the SEC completely rejects all pending Ethereum ETF applications, Balchunas said the next most important date will be Tuesday, November 5, the day of the US presidential election.

“Even if Biden wins, sometimes the running backs change things, which means Gensler could move. If Trump wins, a lot will change,” Balchunas said. This is the reason why I am motivated to make the election a day.

Finally, Blachunas was certain that when, if not, the Ether ETF would become more of a place, and that approval would eventually happen.

“It's hard to nail down, but the more time goes by, the more it gets done.”

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