- GSR now estimates only 20% likelihood of SEC approving spot ether ETF in May, down from 75% in January, due to lack of SEC engagement and political pressure
- Changed circumstances like SEC investigation into ether as security, amendments adding staking, have complicated approval
- Analysts now predict 2025-2026 approval after pushing back timeline amid lower regulatory appetite for further crypto ETFs
Crypto market maker GSR recently revised its estimate of the likelihood of the SEC approving a spot ether ETF in May down to just 20%. This is a major change from its previous prediction of a 75% chance back in January.
GSR’s Previous Optimism
In January, GSR had predicted a relatively high 75% chance that the SEC would approve a spot ether ETF in May. This optimism was driven by Grayscale‘s court victory as well as the approval of Ethereum futures ETFs last October. The dynamics between spot and futures markets were also similar to those preceding bitcoin ETF approvals.
Changed Circumstances
According to GSR analyst Brian Rudick, there has been very little engagement from the SEC recently. Additionally, the SEC is facing political pressure not to approve more crypto ETFs. The SEC’s investigation into whether ether is a security has also lowered the chances.
Rudick speculates the SEC may want to avoid the spotlight of another high-profile crypto ETF approval spectacle. The recent amendments to ETF filings to include staking have also complicated matters.
New Prediction: 2025-2026 Approval
Given the changed circumstances, GSR now believes spot ether ETF approval will take much longer, likely involving litigation. Rudick stated “Our best guess is that spot Ethereum ETFs are approved in 2025-2026.”
Other Analysts Also Lower Predictions
Earlier in March, Bloomberg ETF analysts similarly reduced their spot ether ETF approval odds for May to 30%. Eric Balchunas of Bloomberg stated “The more we see/hear and don’t see/hear, the less optimistic I become.”
Conclusion
With little engagement from the SEC and new complexities introduced through staking, analysts are rapidly losing confidence in a near-term spot ether ETF approval. The timeline has likely been pushed back to 2025 or 2026 amid a lower regulatory appetite for further crypto ETFs.
