The Grayscale Ethereum Trust (GET) has experienced a drop in its value, reaching an unprecedented discount of 20% below its net asset value. This decline is synchronous with fading optimism over the approval of a spot Ethereum exchange-traded fund (ETF) in the United States by May. Analysts have significantly downgraded the likelihood of the approval, with a notable shift in the industry’s confidence.
Downward Adjustments in ETF Approval Odds
This substantial discount indicates the market’s diminished expectations for a spot Ethereum ETF approval in the near future. A successful approval could lead to the Grayscale Ethereum Trust’s conversion into a spot ETF, thereby potentially erasing the discount, as observed with the Bitcoin trust. However, the adjusted predictions suggest that such a transformation is not anticipated to occur shortly.
Expert projections once optimistic have been recalibrated, with Bloomberg ETF analysts cutting the approval probability from 70% to a mere 30%. This aligns with market forecasts. Industry analysts Gautam Chhugani and Mahika Sapra have also highlighted the tempered hopes for an Ethereum ETF launch by the critical date of May 23.
Despite current skepticism, the prospect of a spot Ethereum ETF approval later in the year still remains at 50%. The industry continues to exert pressure on the US Securities and Exchange Commission (SEC), encouraged by the successful introduction of spot Bitcoin ETFs by financial heavyweights.
Industry Insiders See Silver Lining in Delay
While the May approval looks improbable, some experts perceive this postponement as beneficial. Matt Hougan from Bitwise notes that the lag may allow Wall Street to become more familiar with existing Bitcoin ETFs before introducing Ethereum-based ones. He suggests that a deferred approval could lead to a larger influx of assets into ETFs and give market players more time to acclimate to the integration of cryptocurrency ETFs.