What is the state of Ethereum ETFs?

May 21, 2024

You may have noticed that cryptocurrencies were in the green quite a bit this morning. Ethereum in particular, with a 24-hour change of +22% (at the time of writing) stands out. What is the reason for this?

Approval close?

An adoption of Ethereum ETFs is much closer, according to U.S. analysts. Since October 2023, the first Ethereum futures ETFs have become available in the U.S. market. These ETFs offer financial exposure to Ethereum futures, which is an important step toward more mainstream acceptance of Ethereum as an investment vehicle.

Spot Ethereum ETFs, which would invest directly in the underlying Ethereum tokens instead of futures, appear to be able to expect approval from the U.S. Securities and Exchange Commission (SEC), according to Bloomberg analysts. Whereas they previously estimated the probability of approval at 25%, this has now risen to 75%. There are high expectations that these approvals could follow, especially given the recent approval of several spot Bitcoin ETFs, which could be a positive sign for similar Ethereum products. In addition, analysts say there is political pressure on the SEC to approve spot Ethereum ETFs. However, this is not further elaborated on.

Investors and market observers are optimistic that approval of spot Ethereum ETFs is not far away, by the end of this week the SEC should come out with more clarity (applications expire Thursday and Friday). The introduction of these ETFs could further increase the liquidity and accessibility of Ethereum investments and contribute to Ethereum's legitimacy and stability as a key player in the financial markets.

In summary, the prospects for Ethereum ETFs appear promising, according to analysts at Bloomberg, with the existing futures ETFs already showing some market integration and the expectation of the adoption of spot ETFs in the near future.