Optimism Around Spot Ethereum ETF Approval Waning Down, Can ETH Price Rally Continue?

Last week, Ethereum attempted a surge past $4,000 levels, however, faced selling pressure at this point and has partially retraced back. At press time, the Ethereum (ETH) price is trading 2% down at $3,866 with a market cap of $464 billion. All eyes are currently on the Etheruem Dencun upgrade scheduled to go live on the mainnet ahead of this week. However, the optimism around spot Ethereum ETF seems to waning down with time.

Spot Ethereum ETF Approval Unlikely?

Fox Business Journalist Eleanor Terret shared her observations stating that optimism surrounding the approval of spot Ethereum ETFs by the U.S. Securities and Exchange Commission before May 23rd appears to be diminishing.

Conversations with knowledgeable individuals indicate that recent meetings have been largely one-sided, with issuers and custodians actively pushing the SEC staff to expedite the process. However, it seems that the SEC staff have not been as responsive or engaged in meaningful discussions compared to their handling of spot Bitcoin ETF applications.

Terret further added that SEC chairman Gary Gensler perceives that he has already satisfied industry demands with the approval of spot Bitcoin ETFs. Furthermore, prominent anti-crypto politicians such as Senator Elizabeth Warren are reportedly displeased with the SEC’s decision to greenlight Bitcoin ETFs and are actively opposing the possibility of Ethereum ETF approval.

The sources said: “Staff has been very hard to gauge on this and we’re not sure if anyone really knows what’s going on in their heads. But they’re going to have to start work soon if it’s going to have a shot.”

No Strong Correlation Between ETH spot and Futures ETF

Eric Balchunas, an analyst at Bloomberg, noted that the U.S. SEC staff has not provided any feedback to the issuer of the Ethereum spot ETF application, contrasting with their involvement during the Bitcoin spot ETF evaluation.

This lack of engagement is viewed unfavorably, especially considering the notable correlation between Bitcoin spot and future ETF approvals. However, the correlation between Ethereum spot and future ETFs is not as robust, suggesting a potentially less optimistic outlook for Ethereum ETF approval.

Although the Ethereum price has witnessed some pullback, analysts are optimistic about the ETH rally to continue going further. As reported, analysts see a minimum gain of an additional 25% in Ethereum all the way to $5,000. However, post the Dencun Upgrade, it will be interesting to see how the bulls sustain the momentum.