Market confidence in Ethereum ETF approval hits rock bottom

Expectations were high after the Bitcoin spot ETF approval but since then sentiment has turned negative

Bettors on the prediction markets platform Polymarket have shown decreasing confidence in the approval of a spot Ethereum exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC) with votes supporting the approval hitting an all-time low.

In the beginning, prospects seemed favorable and there was optimism surrounding the approval. Back in January, 76% of Polymarket bettors thought that the SEC will give the green light by May 31. However, in the past three months confidence in the approval dropped by a whopping 91% down to its current standing – a mere 7%.

After the SEC approved 11 spot Bitcoin ETFs at the beginning of January this year, several companies filed proposals for spot Ethereum ETFs. Among them were Vaneck, Blackrock, Fidelity, Grayscale, and Invesco with Grayscale for example planning to transform its Grayscale Ethereum Trust (ETHE) into a publicly traded fund.

Back in February, Bitcoin ETFs experienced a major surge in inflows amounting to $2.4bn in total as Bitcoin surpassed the $50,000 threshold. The majority of these inflows went to Blackrock's IBIT.

Expectations were pretty high after the launch of Bitcoin ETFs but since then the market sentiment has turned from positive to negative on the likelihood that the SEC will approve spot ETH ETFs.

In March, the SEC initiated an investigation into Ethereum's classification to see whether it should be considered a security or not, thus complicating things for the approval of spot ETH ETFs.  

Social media, and particularly X (formerly Twitter), is buzzing with opinions and discussions on the topic of spot ETH ETFs, however, there are not many people who believe the approval will happen. One user even commented that there was “zero chance” considering the recent action from the SEC.

During the Microstrategy World 2024 event, Microstrategy executive chairman Michael Saylor joined in the chorus by stating that crypto assets different from Bitcoin are highly unlikely to be included in a spot ETF.

As the end of May is fast approaching the sentiment on Polymarket reflects the overall lack of confidence on the market in the SEC’s decision. Polymarket also offers bets for a SEC decision by the end of June but the state of the sentiment is not much different with only 9% support for a SEC approval.

This pessimistic turn of sentiment is a reflection of the broader uncertainties and regulatory hurdles that crypto assets face worldwide.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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