Ethereum Sees a 16% Spike as Bloomberg Analysts Surprisingly Increase Approval Odds to 75%

  • Ethereum ETFs could get approval as Bloomberg analysts increase their approval odds from 25% to 75%.
  • Grayscale CEO confirms resignation with just days to go before SEC rules on spot Ethereum ETFs.
  • Ethereum could test key support levels if spot ETH ETFs decline.

The price of Ethereum (ETH) rose more than 16% on Monday as Bloomberg analysts updated their odds for spot Ethereum ETF approval to 75%. The fact that Grayscale’s CEO is leaving his position days before the Securities & Exchange Commission (SEC) rules on the ETFs has also complicated analysts’ forecasts.

Read More: Ethereum Surges 5% as Vitalik Buterin Responds to Community Criticism Amid Coinbase ETH ETF Prediction

Daily market movement recap: Ethereum ETF approval now in limbo

Ethereum is expected to experience increased volatility this week as the market anticipates the SEC’s response to the discovery of Ethereum ETF applications. SEC must decide whether to approve or reject Van Eck’s spot Ethereum ETF application on May 23 and Ark 21Shares Ethereum ETF application on May 24.

Ethereum is expected to experience increased volatility this week as the market anticipates the SEC’s response to the discovery of Ethereum ETF applications. SEC must decide whether to approve or reject Van Eck’s spot Ethereum ETF application on May 23 and Ark 21Shares Ethereum ETF application on May 24.

In an interesting position change, Bloomberg analysts Eric Balchunas and James Seyffart have increased their chances of approval of Ethereum ETF from 25% to 75%. According to Balchunas, the SEC “could do a 180” as a result of mounting political pressure.

This comes after US presidential candidate Donald Trump made several pro-crypto statements during a campaign earlier in May. Many have speculated that President Joe Biden could make a pro-crypto move, also to gain support from the crypto community.

Meanwhile, Nate Geraci, president of the ETF Store, provided insight into the SEC approval process for ETFs and how it would impact upcoming decisions in an X-post. He stated that the SEC must approve both 19b-4s (changes in foreign exchange rules) and S-1s (registration statements) before an ETF can be launched.

19b-4s is the application that national exchanges such as NASDAQ or the New York Stock Exchange (NYSE) submit to the SEC to request approval for the listing of a new product on their trading platforms. In the context of ETFs, S-1s refer to the initial registration forms that detail how a fund would be managed and how the price of the underlying asset would be tracked.

Geraci says it is “technically possible for SEC to approve 19b-4s and then slowplay S-1s” given their reported lack of involvement.

However, Bloomberg analyst James Seyffart has said that if 19b-4s are approved, it would only be a matter of “when” and not “if” before S-1s filings are approved. He also clarified that the approval odds only apply to 19b-4s applications.

This follows a report from CoinDesk that exchanges have been asked to expedite updating their 19b-4s filings.

Also read: Ethereum drops below $3,000 again, spot ETH ETF sparks debate in the crypto community

Meanwhile, Grayscale CEO Michael Sonnenshein has stepped down, according to a report from The Wall Street Journal. Peter Mintzberg, head of strategy at Goldman Sachs’ asset management division, will take over as CEO in August.

Sonnenshein also confirmed his departure from the digital asset management company in an X-post on Monday. This follows Grayscale’s withdrawal of its application for an Ethereum futures ETF earlier in May.

With both events taking place just a few days before the SEC decides on Ethereum ETF applications, many members of the crypto community have previously lowered their chances of approval. But with the recent update from Bloomberg analysts, things could turn out positive for Ethereum.

ETH Technical Analysis: Ethereum May Test Key Support Levels

Ethereum is trading around $3,566 on Monday and is seeing an increase of more than 16% on the day. With the SEC’s decision on Van Eck’s spot ETH filing coming Thursday, investors should beware of high volatility.

The support at $3,029 could be crucial for the event in the coming days. A dip below support indicates high bearish sentiment given the expectation that the SEC will reject the filing. However, with the recent price movements, ETH is targeting the resistance at $3,730 as expectations for spot Ethereum ETFs have turned bullish.

Read more: Week ahead: Ethereum and DeFi come into the spotlight this week

According to QCP, “Given the resounding lack of interest in the market, the risk is on the upside with a surprise approval catching everyone off guard, triggering a short squeeze that easily takes us back to recent highs.”

ETH/USDT 4-hour chart

ETH/USDT 4-hour chart

A denial of spot ETH requests could lead to a broad dip after the fair value gap on Monday. However, ETH may not sustain a decline below the $2,914 to $2,852 range as it has shown strength in the weather dips over the past three months.

Frequently Asked Questions About Ethereum Development

Post-merger, the Ethereum community is eyeing the next Sharding upgrade, scheduled for sometime later this year. The development can be summarized in four words: “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, increasing the amount of data that can be stored or accessed. At the same time, all services running on top of the Ethereum blockchain will enjoy significantly lower transaction fees.

A fork is the splitting of a blockchain after developers agree and continue to implement upgrades. The decision comes after these developers agreed on a software upgrade. In the next part, one part will continue with the status as it is, while the other part will continue with new features in combination with the previous one. A hard fork basically involves a new side chain permanently diverging from the original one, while a soft fork does the same thing, the only difference being that it is temporary.

EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises lower gas fees, which is a valuable offering considering the high transaction fees that continue to deter crypto players. It has long been a concern for the Ethereum network. The proposal has been dubbed “proto-Danksharding,” with an unprecedented ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps reduce transaction costs because everything becomes decentralized.

Gastoken is a new, innovative Ethereum contract that allows users to tokenize gas on the Ethereum network. This means they can store gas when it is cheap and deploy the gas once the market has shifted north. Using Gas token helps subsidize high gas prices for transactions, meaning investors can do everything from arbitrage decentralized exchanges to buying into Initial Coin Offerings (ICOs) early.

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