Investors holding their breath for the green light on an Ethereum ETF may have to temper their expectations. Despite Ethereum’s price ascent beyond $4,000, recent insights from a Bloomberg ETF expert cast a shadow of doubt over an imminent rally. This cautionary stance stems from a lack of discourse between the SEC and Ethereum ETF applicants, a stark contrast to the proactive engagements witnessed prior to previous ETF endorsements.
SEC Stance on Ethereum ETFs
Bloomberg analyst James posits that a favorable ruling on the Ethereum ETF, slated for decision on May 23, is unlikely. The industry had witnessed a more optimistic scenario for Bitcoin ETFs, where analysts Eric and James once gave a 90% approval probability due to evident regulatory progress. However, Ethereum’s path seems fraught, with anticipated announcements of postponements for several ETF proposals including those from VanEck and Ark/21Shares.
The analyst’s revised outlook signals a definitive rejection rather than delay, based on the SEC’s silence on the matter. The proactive communication that prefaced Bitcoin ETF approvals is absent, suggesting a dimmer forecast for Ethereum-centric funds.
Market Impact and Ethereum’s Trajectory
Ethereum’s significant network upgrade, dubbed ‘Dencun’, succeeded in reducing transaction fees and heralded a period of negative inflation alongside robust staking interest yielding 4% returns. This was hoped to curb exchange supply and bolster prices. However, the ETF skepticism could inject negativity into the market, potentially pushing investors towards assets with more immediate profit potential.
With selling pressure looming, Ethereum’s price struggle is palpable, sliding from the $4,000 benchmark down to $3,202, and currently hovering below $3,300. The market now faces a critical junction, watching closely as regulatory and investor sentiments unfold.