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Justin Sun Predicts SEC Won’t Approve Ethereum ETF in May
Founder of the Tron blockchain, Justin Sun, recently shared his opinion that the US Securities and Exchange Commission (SEC) is unlikely to approve an Ethereum exchange-traded fund (ETF) in the upcoming month of May. In a social media post on April 28, Sun emphasized the need for the cryptocurrency industry to engage in long-term education efforts with regulators to enhance their understanding of how the industry functions.
“My honest opinion (NFA) is that an Ethereum ETF won’t be approved in May. The crypto industry still needs to prepare for a long-term education with regulators, focusing on helping them understand crypto,” Sun stated.
This viewpoint aligns with the forecasts of various market analysts who anticipate the SEC to reject the pending Ethereum ETF applications. For example, Bloomberg ETF analyst Eric Balchunas estimates the probability of the SEC approving a spot Ethereum ETF in May to be around 25%. Balchunas attributes this skepticism to the SEC’s comparatively limited involvement in the Ethereum ETF application process compared to that of the Bitcoin ETF.
Recent speculations have surfaced regarding the SEC, led by Gary Gensler, considering classifying Ethereum as a security. This development has prompted the filing of a lawsuit against the Commission by Consensys. Furthermore, feedback obtained from recent discussions with the SEC indicates a pessimistic outlook, with approval prospects appearing dim.
These revelations have significantly reduced the chances of an Ethereum ETF approval, with the likelihood dropping to 11%, the lowest level recorded this year, as indicated by Polymarket data.
Despite these challenging circumstances, certain ETF issuers like BlackRock and Grayscale continue to revise their applications, displaying persistence even in the face of silence and the expectation of rejection.
Notably, asset management company Franklin Templeton’s spot Ethereum ETF was featured on the Depository Trust and Clearing Corporation (DTCC) website, despite the SEC postponing its decision on the ETF application on April 23. Craig Salm, Chief Legal Officer at Grayscale, expressed confidence that the SEC’s lack of engagement with spot Ethereum ETF applicants would not be a decisive factor in hindering the potential of such products.
“Investors want and deserve access to Ethereum in the form of a spot Ethereum ETF, and we believe the case is just as compelling as it was for spot Bitcoin ETFs,” Salm remarked.
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