Bloomberg Analyst: Probability of Ethereum spot ETF approval in May drops to 30%

Ethereum has recently shown a weaker trend, possibly due to lowered expectations of its spot ETF approval. Bloomberg's ETF analyst has extended the approval deadline to May and reduced the probability to 30%. However, Bitcoin spot issuer VanEck holds a more optimistic view, stating that Ethereum is a cash-producing asset that may be more meaningful to more people than Bitcoin, with a likelihood of approval at around 50%.

Probability of Approval for Ethereum Spot ETF in May Drops to 30%

Bloomberg ETF analyst Eric Balchunas recently lowered the likelihood of approval for an Ethereum spot ETF in May to 35%, while another analyst, James Seyffart, adjusted his expectations to 30%. Seyffart mentioned in an interview that meaningful discussions between SEC staff and issuers have not yet taken place, and he believes the key still lies in whether the ETF will use cash redemption or physical redemption.

However, Balchunas also emphasized that 35% does not mean there is no chance at all, and in the long run, he believes approval will eventually happen.

Yeah our odds of eth ETF approval by May deadline are down to 35%. I get all the reasons they SHOULD approve it (and we personally believe they should) but all the signs/sources that were making us bullish 2.5mo out for btc spot are not there this time. Note: 35% isn't 0%, still… https://t.co/QWQOGZjDC5

— Eric Balchunas (@EricBalchunas) March 11, 2024

VanEck: Ethereum is an Asset That Produces Returns

According to a report by CoinDesk, VanEck portfolio manager Pranav Kanade stated that from a market perspective, the market size of an ETH spot ETF may be as large as or even larger than a Bitcoin ETF.

Kanade explained:

There is a large number of investors looking for cash-producing assets, and ETH clearly generates income that flows to token holders. Even without an ETF that provides staking services, it is still a cash-generating asset, so I think ETH as an asset may make more sense to more people than Bitcoin.

Note: Due to Ethereum's use of a proof-of-stake consensus mechanism, Ethereum holders can earn rewards by staking or locking up their tokens on the blockchain.

Perhaps because of this, Kanade is more optimistic about the situation of an Ethereum spot ETF, estimating a 50% chance of approval.

VanEck's HODL is one of the Bitcoin spot ETFs in this batch. VanEck recently announced that investors in its Bitcoin ETF HODL can enjoy fee-free management until March 31, 2025, and yesterday, the HODL asset size officially surpassed $5 billion.