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GSR Lowers Probability of Ether ETF Approval to 20%
Why did issuers introduce collateral to increase the difficulty of approval?
Grayscale Ethereum Trust (ETHE) Premium Widens
According to The Block’s report, cryptocurrency market maker GSR released a report on Wednesday, lowering the estimated probability of “SEC approving an Ether spot ETF in May” from 75% in January to 20%.
According to the report, GSR analyst Brian Rudick stated that although factors such as “Grayscale’s victory in the appellate court” and “the existence of approved futures ETF products” give the Ethereum spot ETF many similarities to the previously approved Bitcoin spot ETF, this is why GSR was more optimistic in January.
However, GSR’s analysts have now changed their stance and taken a more conservative approach to the approval likelihood of a spot Ethereum ETF. Brian Rudick wrote in the report:
GSR analysts predict that the approval process for an Ethereum spot ETF may be longer than expected, possibly involving litigation, and is likely to be approved in 2025-2026.
According to Zombit’s previous report, Bloomberg ETF analysts Eric Balchunas and James Seyffart have expressed similar concerns and lowered the probability of approving an Ether spot in May to 25%.
The potential approval of an Ethereum spot ETF does not currently look optimistic, but recently several issuers have modified their ETF applications to include Ethereum collateral in their products. Although this can bring additional returns and attractiveness to the product, it also increases the complexity and difficulty of obtaining regulatory approval.
Brian Rudick speculates that this move may be an attempt by issuers to elicit a response from the SEC regarding their applications, or they may have already given up and are now laying the groundwork for future collateral. Brian Rudick added:
As the market becomes increasingly pessimistic about the potential approval of an Ether spot ETF, the premium of Grayscale Ethereum Trust (ETHE) has also widened. According to yChart’s data, the premium rate of ETHE has expanded from around -8% in March to -24%, directly indicating the market’s pessimistic sentiment.
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