The crypto clock is ticking down to a May decision from the SEC on Ethereum (ETH-USD) ETFs. It seems that Grayscale Investments and BlackRock (NYSE-BLK) aren’t just sitting on their hands—they’re shuffling the deck.
Grayscale has not only filed an S-3 registration statement but is gunning to transform its existing Ethereum Trust into a full-fledged spot ETF. Meanwhile, BlackRock has jazzed up its application, hoping to sway the SEC with a proposed cash-based creation and redemption framework. This marks a significant shift from the traditional in-kind approach, similar to the move they made with the BTC (BTC-USD) ETFs.
Pacing the Regulatory Runway
The updates from both financial giants signify more than routine paperwork. The SEC, notorious for its ‘hurry up and wait’ approach, has extended its timeline numerous times. This has left market participants waiting until the last minute before punting the decision again.
Despite Grayscale and BlackRock’s meticulous preparations, the sentiment around the approvals is less than optimistic. Bloomberg’s ETF guru, Eric Balchunas, slashed approval odds from a hopeful 70% to a grim 25%. Meanwhile, even prediction markets like Polymarket are less bullish, offering a scant 9 to 11% chance of a green light by the end of May.
The High Stakes of an ETF Approval
The implications of an approval are monumental. An Ethereum ETF in the U.S. would provide a more straightforward pathway for investors to gain exposure to Ethereum. An ETH ETF could also signify a broader acceptance and maturation of cryptocurrency as an asset class.
As we edge closer to the decision deadline, the question isn’t about if, but when approval will happen. And even if the SEC says no, the crypto market and ETH bulls are used to their denials and numb to the rejection.
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