While the U.S. Securities and Exchange Commission (SEC) is considering approval of a Spot Ethereum ETF, recent data from Polymarket puts the probability of that happening at 14%.
On the other hand, this expectation level reflects market expectations and the SEC's history of similar financial instruments.
Stable odds reflect market sentiment
according to Polymarket, data from leading prediction platforms shows that the Ethereum ETF has a 14% chance of approval, proving to have achieved encouraging stability. The price pattern has remained unchanged since last month, indicating that market sentiment towards this financial product candidate remains stable but skeptical. The SEC has historically had a notoriously negative approach to new ETFs, especially crypto-based ETFs, which has affected market expectations.
Source: Polymarket
In March, betting patterns on Polymarket revealed that participants were divided over whether loans would be approved by May 31st. Some people object to recognition. However, since then, the overall odds have been pegged at that number, indicating market indecision regarding the SEC's decision.
Historical background and SEC precedent
Initially, there was widespread optimism for the approval of a spot Ethereum ETF, especially after the SEC approved a spot Bitcoin ETF. This approval previously raised the confidence level to around 80%. Nevertheless, recent SEC activity has meant more attention to cryptocurrencies as securities, making it less likely that an Ethereum ETF will be approved.
The SEC's investigation into the Ethereum Foundation continues, with recent subpoenas targeting US-based companies. These subpoenas are adding pressure to the situation related to transactions with the Ethereum Foundation, thereby impacting market sentiment regarding the prospects of the Ethereum ETF.
The SEC has opened public comment periods for several spot Ethereum ETFs, including the Fidelity Ethereum Fund, Bitwise Ethereum Fund, and Grayscale Ethereum Trust. This phase, which he plans to last three weeks, will make it easier for the public to comment on these items. This step signals that the SEC is ready to consider such a proposal, but it does not change the reputation of the idea of gaining approval.
Reactions from the crypto and investment community have been mixed. For some, the public comment period is seen as a positive move toward greater transparency and control. Some think it's a delay in the approval process. The SEC’s final ruling remains a hot topic among traditional investors as well as crypto enthusiasts.
Outlook and expectations
All eyes are on the SEC's immediate ruling on the Ethereum ETF as the May 31st deadline approaches. Market moderate odds are a neutral representation of possible outcomes, reflecting the multifaceted and changing nature of crypto regulation. The SEC’s decision will not only impact the near future of Ethereum ETFs, but will also set a good precedent for other crypto-related financial products.
