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## [TL；DR]: 
According to the data provided by Polymarket, the likelihood of <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> spot ETFs being approved by the end of May has decreased from 76% at the beginning of the year to 7%.

Considering Ethereum's PoS (Proof of Stake) mechanism, potential price manipulation risks, and uncertainty brought about by securitization, these factors reduce the likelihood of approval for spot Ethereum ETFs.

The approval of the Hong Kong Ethereum spot ETF has also opened the door to a larger-scale adoption of Ethereum, and many signals indicate that Ethereum's value space will gradually return.

## Introduction
The approval deadline for Ethereum ETF has been extended to July 5th, and the probability of being approved by the end of this month has dropped to 7%. Can Ethereum, shrouded in FUD sentiment, regain its momentum? This article will provide an in-depth interpretation to benefit readers.
 
## The Controversy over Security Attribute was Difficult to Resolve, and the SEC Postponed the Spot Ethereum ETF
The US Securities and Exchange Commission (SEC) officially issued a statement postponing the approval decision for the spot Ethereum ETF (Exchange Traded Fund) submitted by Galaxy Invesco until July 5th.

Once this news was disclosed, it quickly sparked widespread attention and discussion in the market. The market sentiment has shown diversification, and some investors have expressed disappointment and dissatisfaction. Some even jokingly questioned whether the SEC is waiting for Ethereum prices to reach a specific level before approving.
![](https://gimg2.gateimg.com/image/article/17151523121.jpg)
Source: Bloomberg
 
Previously, eight issuers, including VanEck and ARK Investment Management, had already submitted their listing applications for <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum price</a>-linked ETFs to the SEC. VanEck and ARK's applications were scheduled to receive responses from the SEC on May 23 and 24, respectively.

Despite the SEC's approval of Ethereum futures ETFs in October last year, issuers expect this decision to pave the way for the application of spot ETFs and expressed their determination to address potential regulatory issues during the meeting.

It is worth noting that the current SEC Chairman, Gary Gensler, is skeptical of cryptocurrencies, and the approval of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> spot ETFs was only granted after the victory of Grayscale Investments. Therefore, the approval prospects for Ethereum spot ETFs appear particularly complex.

Many companies still plan to submit more disclosure documents to the SEC to maintain communication with regulatory agencies and seek approval opportunities.

However, due to the suspected nature of Ethereum's securities and the possibility of opening the door to more speculative crypto ETFs, the SEC does not seem to simply extend the precedent of Bitcoin spot ETFs to other products.

According to the data provided by Polymarket, the likelihood of Ethereum spot ETFs being approved by the end of May has declined from 76% at the beginning of the year to 7%. These predictions and concerns reflect the market's pessimistic sentiment towards the approval process of Ethereum spot ETFs.
 ![](https://gimg2.gateimg.com/image/article/17151523432.jpg)
Source: Polymarket
 
## The Market Size Potential of Ethereum Spot ETFs is Enormous
In fact, as a key player in the digital currency market, Ethereum's influence and market value are second only to Bitcoin. Especially in the field of smart contracts that it has pioneered, it not only occupies an essential position in the field of crypto technology, but also demonstrates broad application prospects in multiple industry fields.

Given this, it is natural for the market to pay attention to the approval process of Ethereum ETFs. While the US SEC is responding passively, Hong Kong actively embraces crypto digital assets. It has recently passed Bitcoin and Ethereum spot ETFs, becoming the only virtual currency financial market in the world currently operating Ethereum spot ETFs.

The latest data shows that the cumulative size of six newly launched crypto spot ETFs in Hong Kong has climbed to HKD 2.29 billion. Among them, Bitcoin ETF has a significant advantage, with its total asset value accounting for up to 85%, while Ethereum ETF follows closely with a share of 15%.

As of the writing date, according to the data panel of Soso Value, the Hong Kong Ethereum spot ETF has maintained a net daily sub_script_ion for four consecutive trading days, currently holding a total of 16,740 coins, with a daily transaction volume of $870,000 and a total net asset of $51.51 million. Although Bitcoin still maintains its position as a market-dominant cryptocurrency, it also demonstrates that Ethereum has stable growth potential and market recognition.
![](https://gimg2.gateimg.com/image/article/17151524183.jpg)
Source: Soso Value
 
Meanwhile, Bitcoin ETFs in the US market have experienced capital outflows, starkly contrasting the positive trend in the Hong Kong market.

The innovation and development momentum of the Hong Kong market in the field of crypto ETFs indicates that more Chinese and foreign fund companies will participate in it in the future, and the approval of Ethereum spot ETFs has also opened the door to Ethereum's larger adoption to a certain extent. Its potential growth scale cannot be underestimated.
 
## Approval Delay: When Will Ethereum Prices Go Up?
In fact, since the beginning of the year, after the approval of the Bitcoin ETF, the market has briefly excited the approval of the Ethereum ETF. At that time, the ETH price was once stronger than BTC. Still, as the probability of approval decreased, the ETH price weakened again and continued to follow BTC, resulting in a sluggish price performance passively.

Amidst the SEC's criticism of the security attributes of Ethereum's conversion to POS, there are rumors that the Ethereum Foundation may be under investigation by a certain country or as part of a coordinated attack by the US SEC against Ethereum, which further exacerbates Ethereum's weak market situation.

On the surface, whether Ethereum belongs to securities is the key to the legal positioning of the US SEC. In reality, it is competing with other regulatory agencies for jurisdiction.

The SEC has not yet explicitly stated whether Ethereum is a security. The previously approved Ethereum futures ETF would make this argument untenable, while Rostin Behnam, Chairman of the U.S. Commodity Futures Trading Commission, insists that it is a commodity. Meanwhile, Patrick McHenry, Chairman of the U.S. Financial Services Commission, criticized the SEC's investigation into Ethereum and called on Congress to pass a clear digital asset regulation bill to promote innovation and protect consumers.

Considering Ethereum's PoS (Proof of Stake) mechanism, potential price manipulation risks, and uncertainty brought about by securitization, these factors collectively reduce the likelihood of approval for spot Ethereum ETFs. Therefore, we may need to be mentally prepared for the further postponement of the Ethereum ETF.

Reflected in market pricing, the ETH/BTC exchange rate has not been recovered since falling below 0.05, and the grayscale ETH premium rate of -24.78% has not improved. This seems to indicate that the Ethereum spot ETF is unlikely to pass in May, and Ethereum prices are still fluctuating weakly in the short term.
![](https://gimg2.gateimg.com/image/article/17151524634.jpg)
Source: Gate.io

Looking at it from an extended perspective, although Ethereum has many unique advantages, market reactions are often not entirely rational and may be influenced by people's enthusiasm and panic (FUD) towards new things. For example, the gas cost on the Ethereum network has recently fallen to a new low in nearly six months, and the current low cost may indicate that Ethereum network activity is about to increase, and Altcoins are about to rebound.
 ![](https://gimg2.gateimg.com/image/article/17151524825.jpg)
Source: santiment
 
We mustn’t overly worry about the potential negative impact of the US Securities and Exchange Commission (SEC) on Ethereum, as we have learned from the past. In fact, even <a href="/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a> has not been successfully defined as a security by the SEC. Ethereum's current status and influence are no longer easily shaken by any single institution. The Web3 and crypto innovation it represents are indisputable future trends, and its value space will gradually return.



<div class="blog-details-info">
<div>Author:**Carl Y.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>


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The game between market sentiment and value, rationally viewing short-term FUD fluctuations, patiently waiting for a return.

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Ethereum Spot ETF May be Delayed, When Will the Bull Market Restart?