In an unexpected turn of events, hopes for the introduction of an Ethereum ETF surged dramatically, seemingly out of nowhere. On May 20, Bloomberg ETF analyst Eric Balchunas raised eyebrows with a post on X, indicating a shift in his outlook from a mere 25% chance to a whopping 75% probability of an Ethereum ETF approval by the SEC.
This sudden change sent shockwaves through the market, with the price of Ethereum spiking from under $3,100 to over $3,800 within a span of just 24 hours. Balchunas's optimistic assessment stems from insider chatter suggesting a possible reversal in the SEC's stance. He speculates that the SEC might opt for a compromise by approving 19b-4 filings, a preliminary step that could pave the way for ETF listings while reserving final judgment until they complete thorough reviews of each ETF application.
However, it's crucial to remember that Balchunas's perspective is just one among many. While he's considered a reputable source, the broader market sentiment on the likelihood of an Ethereum ETF approval by week's end remains diverse.
Meanwhile, Polymarket, a platform harnessing cryptocurrency for event betting, witnessed a frenzy of activity following Balchunas's remarks. Before his statement, the platform pegged the odds of an ETF approval by May 31 at a mere 10%. However, within hours of Balchunas's update, these odds skyrocketed to nearly 75%, presenting a tempting opportunity for bettors.
Currently hovering around 70%, the odds imply substantial potential returns for those betting on approval, while skeptics stand to gain significantly by wagering against it. Nonetheless, the language of the bet's terms introduces some ambiguity, as the process of ETF approvals may not neatly align with its strict criteria.
Nevertheless, this betting market offers a fascinating glimpse into how retail and institutional players are assessing the prospects of Ethereum ETFs materializing by the week's end.