In a recent change of perspective, Bloomberg analysts significantly lowered the forecast for approval of an Ethereum spot exchange-traded fund (ETF) by May, pegging the probability at just 35%.
According to Eric Balchunas, there is a good chance that down sharply compared to previous estimates, which ranged between 60% and 70%.
The revision reflects growing skepticism about the regulatory green light for Ethereum ETFs, contrasting with the previously more optimistic stance.
No signs of activity
The analysts' caution follows recent discussions between Coinbase, Grayscale and the SEC regarding the potential conversion of Grayscale's Ethereum Trust into an ETF. While such meetings can generally indicate a positive trajectory, the lack of subsequent comments from the SEC has tempered expectations.
Balchunas and other analysts, including James Seyffart and Eleanor Terret, said there was a distinct lack of activity in regulatory circles, even though the deadline is two months away.
In contrast, there was strong activity among SEC and Bitcoin ETF issuers for more than 10 weeks before the applications were approved.
Seyffart said:
“This Ethereum ETF cycle appears to be the opposite of Bitcoin ETF’s chances of approval at the moment. The more we see/hear (and don't see/hear), the less optimistic I become.
Analysts add, however, that activity could accelerate in the coming days. They also said that it is still expected that an ETH ETF will be approved this year – even if it is not in May.
A cautious hope
Despite these lowered expectations, some industry observers, such as Variant Fund's general counsel, Jake Chervinskystay cautious optimismsuggesting that the coming weeks could provide clearer signals on the direction of the SEC.
However, he also raised concerns that the SEC might treat Ethereum as a security and would not be willing to approve applications without judicial intervention.
The general sentiment appears to be veering toward skepticism, with major investment banks such as JPMorgan and TD Cowen also forecasting an unlikely approval by May.
Unlike Bloomberg analysts, crypto market-making firm GSR maintained a more optimistic stance, initially estimating a 70% chance of approval.
However, the company recently admitted that this optimism could soon fade if there is no visible progress over the next month.
Meanwhile, Standard Chartered has repeatedly stated that the SEC will likely approve Ethereum ETFs in May.