According to an industry observer, there’s a 90% chance that the SEC will approve a spot Ether ETF, noting the recent narrowing discount in the Grayscale Ethereum Trust.
Early Thursday, Bitcoin (BTC) and Ether (ETH) held steady after their recent gains, as the market awaited the SEC’s decision on VanEck’s spot Ether ETF application later in the day. Bitcoin, the largest cryptocurrency by market value, remained relatively unchanged around $69,500, while Ether, the second largest, hovered near $3,700.
Technical analysis suggests a bullish trend for both cryptocurrencies, as they stayed above their respective Ichimoku cloud lines. Analyst Josh Olszewicz highlighted this positive outlook on X (formerly Twitter). Data from derivatives exchange Deribit, tracked by Amberdata, also showed a preference for call options on Bitcoin and Ether, indicating traders are betting on price increases.
This bullish sentiment is likely driven by high expectations for the SEC’s approval of spot Ether ETFs, which would boost demand for cryptocurrencies. “The SEC is expected to approve U.S.-listed ETH ETFs today. Just before the Bitcoin ETF approval, SEC Chair Gensler tweeted a reminder for crypto investors to consider all potential risks. We might see a similar tweet around 9 a.m. ET today, which could hint at an imminent approval,” noted Markus Thielen, founder of 10x Research, in a client note. He also mentioned that the Grayscale Ethereum Trust’s discount to net asset value has narrowed from 30% to just 8% in the past week, suggesting a high likelihood of ETF approval.
This optimism follows reports that the SEC had requested updates and amendments from spot Ether ETF applicants, indicating potential approval. “Approval of spot Ether ETFs would mark a significant shift in the SEC’s stance towards the crypto industry and suggest that opposition to the Financial Innovation and Technology for the 21st Century Act (FIT21) may not be as strong as feared,” said Noelle Acheson, author of the Crypto Is Macro Now newsletter, to CoinDesk.
On Wednesday, the U.S. House of Representatives passed the FIT21 Act, which aims to clarify whether cryptocurrencies are commodities or securities, with the SEC providing stricter oversight if classified as securities. The bill also proposes establishing the Commodity Futures Trading Commission (CFTC) as a key regulator of digital assets alongside the SEC.
The bill now moves to the Senate, where its future remains uncertain. Even if it passes, President Joe Biden could still veto it.
