The power of public opinion can make a city know what is going on. Everyone knows that the momentum and public opinion can be heated up in the early stage. Even if some people oppose it, they cannot stop the consensus of public opinion. As the movie "The Crowd" said, once a group is formed, individual resistance will be easily drowned out, especially in a country that claims to be free and democratic.
Yesterday, Ethereum, which emerged from nowhere, surged by more than 20% to a high of 3,700, once again verifying the madness of the panic-stricken crowd. This came from a well-founded speculation: the spot Ethereum ETF is about to be approved!
Bloomberg analyst Eric Balchunas wrote: I heard some rumors this afternoon that the SEC might make a 180-degree turn on this issue (this issue is becoming more and more political), so everyone is preparing desperately now (like us, everyone else thinks it will be rejected). He also reiterated that the probability will be capped at 75% until more evidence is seen, such as an application update.
According to Coindesk, the SEC has asked exchanges to speed up the update of 19B-4 documents regarding spot Ethereum ETFs . 19b-4 documents are documents submitted by exchanges. This type of document is usually related to changes in the rules of exchange operations, such as the introduction of new products, modification of trading mechanisms or other related exchange policies.
It's a familiar pattern. The predecessor of this pattern is Bitcoin ETF. The news of the false approval of Bitcoin ETF made the crypto circle boil. It stepped out from the corner on the edge of the stage onto the formal lighted stage. Crypto represented by Bitcoin gained global attention under the spotlight. OTC funds and numerous press releases directly opened the door to the bull market, and the market value of crypto reached a new high.
After the Bitcoin ETF was officially confirmed and passed and continued to serve as a channel for crypto and other financial transactions, the proposal for the Ethereum ETF has never stopped, but the traditional SEC will not satisfy two hopes at once, especially since Ethereum was once recognized as a security rather than a commodity. The probability of the Ethereum ETF being passed this year once fell below 30%. It can be seen that the news that the Ethereum ETF will be passed will have an impact and subversion on crypto.
what is the reason?
The separate and autonomous agencies do not seem to have handled the consistency of communication well. The SEC's trading and market division is responsible for approving 19b-4 applications, while the finance department is responsible for S-1 applications. On Monday, the SEC's trading and market division called the exchange to inform it that they would approve the 19b-4 application (spot Ethereum ETF), while the S-1 reviewers did not seem to want to pass it so quickly.
The SEC must approve both 19b-4s and S-1s before an ETF can be legally sold to the public. If the SEC approves Rule 19b-4s but not S-1, it means that “the ETF can be listed on an exchange, but the ETF cannot be legally sold to investors.”
Why would they approve part of the application and then decide when the time is right when internal opinions have not yet reached a consensus?
Maybe it was a political decision.
As the election approaches, former President Trump has publicly supported cryptocurrency over the past month. The former president told a group of people who purchased his NFT that President Joe Biden had no idea what cryptocurrency was and said: "If you like any form of cryptocurrency, there are a lot of different forms, if you support cryptocurrency, you better vote for Trump."
The Biden administration, as its opponent in the election, also hopes to win the votes of young people. The support of crypto voters has now become its political goal, and winning through the SEC's approval of the Ethereum ETF seems to have become a legitimate means.
The influence and role of the leader's opinions in the group have surpassed the truth of the facts. What the group likes, believes in, and makes the group feel excited are always those legendary stories rather than real and ordinary life.
The Ethereum spot ETF applied by VanEck will have its final decision on May 23, and the Ethereum spot ETF applied by Ark and 21 Shares will have its final decision on May 24. If the ETH spot ETF is approved, it may further push up the price of ETH, which is the biggest catalyst for ETH and even the entire crypto market. But if it is rejected, ETH may face a pullback, but the prospects for the approval of the Ethereum spot ETF have changed, and the overall future trend remains optimistic.
Capital that enters through ETFs usually does not care about ETH's consistency, re-staking yield, decentralization, scale, and the controversy of low floating and high FDV. Will the funds that only want to harvest quickly have the opposite effect of forcing the growth of seedlings? Will the Wild West end in a mess? The challenges that Ethereum is facing may have just begun.
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