Ether ETFs' May Approval Unlikely, Analysts Say

Bloomberg analysts note SEC's lack of engagement with applicants differs from behavior during bitcoin ETF process.

Finance Reporter
Reviewed by: Staff
Edited by: Ron Day

Approval of spot ethereum ETFs fast on the heels of the launch of spot bitcoin funds looks increasingly unlikely, according to Bloomberg analysts who see roadblocks to approval.

Unlike the leadup to the historic Jan. 10 Securities and Exchange decision to permit trading of spot bitcoin ETFs for the first time, the agency isn't engaging with potential ethereum ETF issuers, analysts James Seyffart and Eric Balchunas wrote in separate posts on X. The SEC has also delayed the approvals of several spot ethereum ETFs in recent weeks, leading to shrinking confidence that the investment vehicle could be approved May 23.

"My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round," Seyffart wrote. "The SEC hasn't engaged with issuers on Ethereum specifics. Exact opposite of Bitcoin ETFs this fall."

The SEC opened a pandora’s box of spot crypto ETFs approvals when it permitted ten novel spot bitcoin ETFs in mid-January after a decade long regulatory battle. The runup to their launch, as well has their subsequent trading, has helped push bitcoin to record prices and pushed the funds' assets past $35 billion. The iShares Bitcoin ETF (IBIT) has attracted over $10 billion in fresh inflows as the price of bitcoin has risen 44% year to date.

Balchunas, who had regularly boosted the odds of the spot bitcoin ETF being approved in the months before they got the green light, cut the odds of ethereum approval to 25% from as high as 50%. "Right now it ain't looking good," he tweeted today.

"If SEC gave comments our odds would at least double," he wrote in another post. "The circumstantial evidence backing up why they may be not giving comments/prepping denial is also stronger here than it was" with the spot bitcoin process, he added.

The Securities and Exchange Commission has delayed its decision on approving a slew of applications, including filings from Ark Invest, Hashdex, Grayscale Investments, and BlackRock Inc. VanEck’s proposed fund is teed up for a final verdict on May 23. 

“The biggest sticking point is whether ether is or isn’t a security in the SEC’s eyes, and the regulator seems unwilling to make that call at this time,” analyst Sumit Roy said. “The cryptocurrency certainly has characteristics of a security—but it also has characteristics of a commodity. I think the SEC would much rather that lawmakers decide how ether and crypto assets should be classified, but until that happens, it will probably delay the approval of ether ETFs for as long as it can.”

The regulator has been seeking public comments on the funds, asking commenters to address concerns about market manipulation and fraud, which were among key issues that prevented a quick approval of spot bitcoin ETFs.

The price of ethereum is up 40% year to date as investor excitement about cryptocurrency has propelled a bull crypto market. Yet in the past week the price fell below $3,300 and is down overall 12% over the past five days.

Contact Lucy Brewster at [email protected].

Lucy Brewster is a finance reporter at covering asset managers, emerging technologies, and regulation. She hosts webinars and appears on Exchange Traded Fridays,’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.