Experienced Analyst Predicts Unlikelihood of Ethereum Spot ETF Approval in May: “Unlike Anything Else This Year”
Cryptocurrency analyst GSR has adjusted its forecast for the approval of a spot Ethereum ETF in May, now estimating the probability to be just 20%. This revision represents a significant decrease from the firm’s original prediction in January, which placed the chance of approval at 75%.
Explaining the revised forecast, GSR analyst Brian Rudick stated, “We now believe there is a 20% chance that the SEC will approve a spot Ethereum ETF in May.” Previously, a more optimistic outlook was influenced by Grayscale’s Court of Appeals victory and the approval of Ethereum Futures ETFs in October, according to GSR Research Analyst Matt Kunke.
Rudick acknowledged the similarities between the conditions surrounding spot Bitcoin ETF approvals and those needed for spot Ethereum ETF approval, including the existence of a futures-based ETF and a strong correlation between the spot and futures markets. However, he has now adopted a more cautious stance due to minimal SEC interest, political pressure against digital asset ETFs, and an alleged SEC investigation into the security status of ETH.
The analyst now anticipates a longer approval process for spot Ethereum ETFs than previously expected. “Our best guess is that the process will take much longer and will likely involve litigation, and we now believe spot Ethereum ETFs will likely be approved in 2025-2026,” Rudick added.
Furthermore, Rudick highlighted the surprising trend of several applicant companies amending their ETF applications to incorporate ETH staking. While an ETF offering staking returns may be more appealing, he questioned why companies would complicate the already fragile approval process.
Speculating on the reasons behind this trend, Rudick suggested that companies may be seeking a response from an unresponsive SEC or preparing for potential future staking features following possible rejection in May. “Both of these reasons, if true, point to lower approval ratings for May,” he concluded.
*This article should not be considered as investment advice.