Ethereum Spot ETF in May? 6 Analysts Give Predictions

Just two months after their approval, spot bitcoin ETFs have exploded in popularity. They have attracted more than $11.8 billion in investments, including a record $1 billion in one day. This influx of money has driven the price of bitcoin to an all-time high of nearly $73,000, up nearly 60% this year. Ethereum, the second largest cryptocurrency, has also risen to almost $4,000. However, Ethereum has not yet seen its own ETF, but will that change?

Anticipation of spot ethereum ETF approval

The rise in the ethereum price is partly due to expectations around the deadline of the US Securities and Exchange Commission (SEC) to respond to VanEck’s first application for a spot ethereum ETF on May 23.

Experts like Matt Hougan of Bitwise and Vance Spencer of Framework Ventures expect a smooth approval unless there are unforeseen issues. Aurielle Barthere, a research analyst, suggests that influential figures like BlackRock’s Larry Fink can win over the SEC with their impressive track record on ETFs.

Possible obstacles to approval

However, there are some potential obstacles. Some ETF companies, including Ark and Franklin Templeton, are considering adding Ethereum staking, which Hougan said could pose a significant problem. But he notes that staked eth represents only a quarter of total coins and that emerging bitcoin spot ETFs still make up a small portion of the currency’s market value.

Matteo Greco, a crypto analyst at Fineqia International, sees some centralization as a necessary concession for the market to achieve mainstream popularity. He points to the dominance of 11 publicly traded US bitcoin miners in the network’s hashrate.

Legal status of ETH and liquidity issues

Another potential obstacle is the legal status of ETH. While the SEC has classified many other popular coins as securities, its stance on Ethereum has been inconsistent. This adds complexity to the approval process, according to Bitfinex’s Jag Kooner.

The relative newness of ethereum futures ETFs, launched in October 2023, and ETH’s lower liquidity and market cap compared to bitcoin, could also pose challenges. Despite these potential hurdles, Spencer and Barthere remain optimistic about a 60% to 70% approval rating in May. Hougan is more cautious, but still sees a 75% chance of approval by the end of the year.

Still, Jake Chervinsky warns that approval in 2024 is unlikely. He suggests that silence from the SEC until the May 23 deadline could be telling.