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Ethereum: Analyst sees ‘bleak’ future for Ethereum ETF, but why?

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Bloomberg analyst believes that a May rejection could leave ETH ETF under the whims of the US elections.

Ethereum ETF

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  • Bloomberg analysts maintain that the ETH ETF approval odds are still low. 
  • In case of a May rejection, the timeline could be affected by US elections. 

Senior Bloomberg ETF analyst Eric Balchunas maintains his low approval odds of Ethereum [ETH] ETF in May. Not even the recent Bitwise ETH ETF filing and correlation analysis has swayed the analyst’s position. 

On 28th March, Bitwise submitted a new 19b-4 form alongside a correlation analysis to satisfy SEC’s criteria, as seen during the spot Bitcoin BTC ETF application.  

The firm stated

“This is the first ETH correlation analysis to replicate the specific methodology used by the SEC in their evaluation of bitcoin, and the results are encouraging.”

Great correlation, but ETH ETF odds are still low

Jake Chervinsky, chief legal officer of Variant Fund, hailed the correlation analysis; 

“Fantastic work from Bitwise here, showing an extraordinarily tight correlation between ETH spot and futures, using the SEC’s methodology.

Chervinsky added that Bitwise analysis could make it hard for the SEC to deny ETH ETF based on correlation. 

But Nate Geraci of ETF Stores took a swipe at SEC;

“Sad we need an ETF issuer to run correlation analysis showing that govt agency approved futures contracts tightly track price of underlying asset…

And a sister govt agency has approved ETFs holding said futures but won’t approve ETFs holding underlying.”

In rejoinder, however, Bloomberg ETF analyst Eric Balchunas said the developments don’t improve approval odds. 

“There’s 7 weeks till the deadline, and radio silence from SEC = bleak”

Additionally, Balchunas noted that if there is a rejection in May, the timeline might have to be re-adjusted to the US elections. 

“Election next. Then see what landscape looks like.”

That means investors vested in spot ETH ETF approval may need to wait longer if the May deadline doesn’t hold. 

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Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with charts and patterns, he's interested in making the intricate, complex landscape of digital assets more palatable for every user.
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