In the cryptocurrency investing space, there has been much debate and conjecture surrounding the possibility of an Ethereum Spot Exchange-Traded Funds (ETF). However, in light of continued regulatory hurdles, Bloomberg Intelligence senior analyst Eric Balchunas said Free a gloomy view of the products, noting that the firm is now more pessimistic than ever about the likelihood of the funds being approved by the U.S. Securities and Exchange Commission (SEC).
Ethereum Spot ETF Pessimism Prevails
Eric Balchunas’ ideas came in response to Fizen CEO Leo Vu’s post regarding Grayscale CEO Michael Sonneshein’s optimism about the approval of Ethereum Spot ETF. According to Michael, he is very confident that the SEC will grant the company’s request to convert its Ethereum trust into a spot ETF.
In response to this post, Balchunas expressed his displeasure with the CEO’s claims, highlighting his disagreement and Bloomberg’s continued pessimism towards the products. Although Balchunas believes the funds could be authorized in the near future, he believes it won’t happen within a year. However, the November election and what Grayscale says about denial are important factors that could trigger a change in the forecast.
Balchunas further noted that Sonneshein mentioned that Grayscale decided to delist its ETH futures ETF filed under the Securities Act of 1933 because it wanted to focus more on its Spot ETF. At the same time, the primary purpose of filing ETH futures under the 1933 Act, as opposed to the 1940 Act, was to create a legal opening.
The expert believes a potential reason why Grayscale made this decision could be because they don’t want to pay the full cost again to give Blackrock a massive ETF run, as seen after approval of Spot Bitcoin ETF while taking a lot of crap from people due to the unblocking of exits.
Shared view on Grayscale ETF withdrawal
Balchunas’ ideas have caused quite a stir in the crypto community. Scott Johnsson, a financial lawyer and author, expressed agreement with the Bloomberg analysts’ analysis.
Johnsson perhaps shares Balchunas’s view on why Shades of grey withdrew its Ethereum futures contracts; however, he believes that by taking such a step, the company has shown its true intentions. “Can I blame them? I don’t know, but don’t piss on my leg and tell me it’s raining,” he added.
He further stated that without withdrawing ETHE itself, Grayscale could not claim to be trying to convert ETHE while simultaneously engaging in the most significant action to obstruct this goal.
So, Balchunas agreed with Johnsson in saying that the part where he mentioned that Grayscale was taking a bunch of crap from people was due to the high cost, which the company is responsible for. “I’m not letting them off the hook for what they said regarding conversion, but rather trying to get others to see it from their perspective/self-interest. When you do that, everything starts to make sense,” he added.
It is worth noting that the chances of approval of Ethereum spot ETFs today are now stay at just 9%, a drop of almost 90% since the first filings.
Featured image from iStock, chart from Tradingview.com
