Top Journalist Says Optimism About Ethereum Spot ETF Approval in May Is Waning 

Eleanor Terrett, a pro-crypto journalist working with Fox Business media outlet, shares interesting update about the SEC’s potential approval of Ethereum (ETH) spot exchange-traded funds (ETFs) in May. 

According to Terrett, optimism for the approval of at least one spot Ethereum ETF by May 23 is gradually waning. 

🚨SCOOP: Optimism about the @SECGov approving the $ETH spot ETFs by May 23rd is waning.

Based on my conversations with people familiar, meetings in recent weeks have been very much one sided, with issuers and custodians trying to rally SEC staff to get the process rolling, but…

— Eleanor Terrett (@EleanorTerrett) March 10, 2024

Discussion About Ethereum Spot ETF Now One-Sided 

Citing sources familiar with the matter, Terrett noted that recent conversations regarding the approval of spot Ethereum funds have been one-sided. 

She said that while prospective Ethereum spot ETF issuers have tried to convince the SEC’s staff to commence the approval process, the securities regulator has not made any positive effort as they did with spot Bitcoin funds. 

Reasons Behind SEC’s Behavior 

The pro-crypto journalist outlined two reasons behind the SEC’s lackadaisical attitude toward approving spot Ethereum ETFs. 

Per Terrett, SEC’s chair Gary Gensler believes he has already pacified the crypto industry by approving multiple Bitcoin ETFs. Recall that Gensler’s vote was the game changer that birthed Bitcoin spot ETFs in the U.S. 

The Crypto Basic reported in January that Gensler, Mark Uyeda, and Hester Peirce were the three commissioners who voted for the approval of Bitcoin spot ETFs. 

Additionally, Terrett stated that another reason for the SEC’s recent behavior is that anti-crypto politicians, including Senator Elizabeth Warren, are already rallying against the potential approval of the ETH-based product. 

Terrett pointed out that politicians like Warren have been furious with the SEC for approving Bitcoin spot ETFs. Hence, they have been making moves to prevent a recurrence for Ethereum. 

With just two months left before May 23, one of the sources told Terrett that the SEC needs to start working on the multiple Ethereum spot ETF applications soon to give the product a chance of getting approved by May 23. 

Bloomberg Analyst Shares Similar Sentiment 

Notably, prominent ETF analyst Eric Balchunas echoed a similar sentiment last week. Balchunas, who predicted that the SEC would approve at least one Ethereum ETF application by May 2024, no longer feels optimistic about this prediction. 

He made this known while reacting to a meeting between SEC staff and Coinbase’s representatives on March 6 regarding Grayscale’s application to convert its Ethereum Trust (ETHE) to a spot Ethereum ETF. 

It bears mentioning that Grayscale used Coinbase as its custodian for the prospective spot-based Ethereum fund. 

Commenting, Balchunas said he would have referred to the SEC and Coinbase meeting as a good sign. However, Balchunas emphasized that the SEC’s refusal to issue comments to Ethereum spot ETF issuers does not seem like a positive sign. 

Another reason the analyst is less optimistic about Ethereum spot ETFs is that the agency has not suffered any court loss regarding the approval of Ether-based funds. Recall that the SEC was motivated to approve all Bitcoin spot ETFs following its loss against Grayscale Investments in August.  

Although optimism for Ethereum spot ETF approval by May 23 has reduced, ETH price has continued to record significant gains. The second-largest cryptocurrency recently broke the $4,000 resistance, surging to a 24-hour high of $4,030. ETH was trading at $4,008 at press time, representing a 13.5% gain in the past seven days.