The speculation surrounding the approval of a spot Ethereum exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC) has captured the attention of industry watchers.

Among them, Bloomberg’s Senior ETF Analyst Eric Balchunas offered a grim outlook, suggesting only a 25% chance of approval.

Balchunas, who had previously predicted the approval of a spot Bitcoin ETF in the US, pointed to the lack of engagement by the financial regulator. According to him, this is a negative sign contrasting the hopeful anticipation of parts of the crypto community.

“We are holding the line at 25% odds, although, to be honest, it is a very pessimistic 25%. The lack of engagement seems to be purposeful vs procrastination. No positive signs or intel anywhere you look. I personally hope they do approve it, but it just ain’t looking good,” Balchunas said.

Still, Grayscale’s Chief Legal Officer, Craig Salm, provided a counterpoint. He emphasized that the SEC’s silence should not be interpreted negatively.

Salm argued that the groundwork laid during the Bitcoin ETF approval process could streamline the path for an Ethereum ETF.

“All of these issues were figured out and are identical when comparing spot #Bitcoin to #Ethereum ETFs. The only difference is rather than the ETF holding bitcoin, it holds ether. So in many ways, the SEC already has engaged and issuers simply have less to engage on this time,” Salm noted.

Read more: Ethereum ETF Explained: What It Is and How It Works

However, the broader market sentiment observed by BlackRock seems to align more closely with Balchunas’s skepticism. Despite the growing diversification within cryptocurrency portfolios, BlackRock revealed a dominant preference for Bitcoin over Ethereum among clients.

Indeed, the appetite for other cryptocurrencies, including Ethereum, remains “very, very little,” according to BlackRock’s Head of Digital Assets, Robert Mitchnick.

Further complicating the prospect of an Ethereum ETF’s approval are recent SEC actions that hint at a regulatory crackdown. Reports of subpoenas issued to crypto firms concerning their affiliations with the Ethereum Foundation have stirred investor concerns. Still, Coinbase’s Chief Legal Officer, Paul Grewal, believes Ethereum does not meet the criteria of an “investment contract” under the Howey test.

The post Senior Analyst Who Predicted Bitcoin ETF Says Ethereum ETF Has No Chance appeared first on BeInCrypto.

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