With an overnight surge of 20%, is ETH ETF approval imminent?

With an overnight surge of 20%, is ETH ETF approval imminent?

by WOO X Research

Update: SEC could decide spot Ethereum ETF this Friday, Bloomberg analysts

On the evening of May 20th, Ethereum (ETH) quickly surged from $3,100 to $3,700, or an increase of over 20%. The rise is primarily due to heightened expectations of the Ethereum spot ETF's approval, sweeping away previous speculations about ETH's downfall. ETH's aggregated market value exceeded MasterCard and LVMH, ranking 24th globally in the asset category.

Rising Odds of ETF Approval

The Ethereum Spot ETF application submitted by VanEck and other asset-managing entities is nearing the SEC's final adjudication day. The marketplace foresees a decision from the SEC on this matter around May 23rd. Previously, there was only a 25% probability of the SEC approving ETH. However, Bloomberg analyst Eric Balchunas said on May 20th that there could be a 180-degree shift in stance due to political issues, increasing the probability of ETF's approval to 75%.

Crypto Rising as a Prominent Political Contention

Recently, Trump has openly vocalized his support for crypto, and the Democrat-headed Senate voted 60 to 38 last week to nullify the SAB121 bill which requires businesses to incorporate held crypto assets into their balance sheets. Critics argued that these stipulations are excessively stringent, disrupting key custodians and companies' ability to hold crypto assets on behalf of clients.

Therefore, the abolition of the SAB121 bill can be seen as the Democrats beginning to embrace crypto. Perhaps the underlying purpose is out of votes, but it is certain that both the Democratic and Republican parties want to please the crypto electorate. It can be expected that there will be further relaxation of regulations or supervision on cryptocurrencies.

Gary Gensler Becomes the Deciding Vote

May 23rd - May 30th is the review deadline for VanEck, 21Shares, and Hashdex Ethereum's ETF. The same five commissioners who reviewed the Bitcoin ETF will vote on ETH ETFS. If the voting results of the four commissioners are the same as last time, with two for and two against, US SEC Chairman Gary Gensler's choice would likely become the decisive vote.

Which Sectors and Tokens Will Benefit if ETH ETF Passes?

If the ETH ETF passes, the most direct benefit will be to ETH per se, but due to ETH’s large market value, it may not show a huge increase in a short time. Investors with a higher appetite for risk might consider opting for lower-capitalization tokens associated with ETH:

Layer 2:$ARB、$OP、$METIS

DeFi:$ENA、$PENDLE、$SSV、$UNI、$MKR

Restaking:$ETHERFI、$REZ、$LDO、$ALT

Others:$ENS

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