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Bloomberg Analyst Cautions on Prospects of Ethereum ETF Approval

Senior ETF Analyst Eric Balchunas from Bloomberg expressed skepticism regarding the approval of a spot Ethereum ETF, estimating the chances at a pessimistic 25%. Balchunas highlighted the lack of positive signs or indicators of engagement from the SEC, suggesting a purposeful avoidance rather than procrastination.

The debate surrounding Ethereum ETF approval extends beyond mere speculation, with industry insiders offering diverse perspectives. Craig Salm, Chief Legal Officer at Grayscale, offered a contrasting viewpoint, suggesting that the SEC’s silence may not necessarily indicate disapproval. Salm noted that positive and constructive engagement was observed in the final months leading to Bitcoin ETF approval, implying a potential groundwork for Ether ETF approval.

Salm emphasized that core issues addressed during the Bitcoin ETF approval process, such as creation/redemption procedures and custody concerns, are relevant to Ether as well, indicating a basis for engagement with the SEC.

However, concerns linger regarding the SEC’s stance on Ether classification, with reports indicating subpoenas issued to crypto firms regarding interactions with the Ethereum Foundation. This has raised speculation about the SEC’s intention to classify Ether as a security.

Alex Thorn, head of firmwide research at Galaxy Digital, views these developments as significantly reducing the likelihood of spot Ether ETF approval in the near future, considering it “extremely unlikely.”

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