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Will Ethereum ETFs be approved on Thursday? Here’s What This Crypto Prediction Market Tells Us
Will Ethereum ETFs be approved on Thursday? Here’s What This Crypto Prediction Market Tells Us
In a wild series of events, hopes for an Ethereum ETF spot came seemingly out of nowhere. On the afternoon of May 20, Eric Balchunas, an ETF analyst at Bloomberg, posted in X, noting that he is increasing his odds of approval for a spot Ethereum ETF from 25% to 75% after “hearing rumors this afternoon that the SEC could be doing a 180.” The price of Ethereum skyrocketed almost instantly, going from under $3,100 to over $3,800 in less than 24 hours.
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Balchunas believes ETFs have a solid chance of at least partial approval by Thursday, which is the final date for the VanEck ETF application. According to Balchunas, there is a possibility that the SEC will approve 19b-4 filings, which would allow ETFs to be listed on the exchange. However, ETFs would also need S-1 approval, a detailed registration document for each ETF. The move, according to Balchunas, would allow the SEC to get the ball rolling on ETFs and still have time to do due diligence on each ETF application before making a final decision.
However, Balchunas is just a single opinion. While he is a seasoned expert and likely has truthful information to support his position, it is also important to consider what others are thinking about the likelihood of an ETH ETF within a week.
Polymarket is a unique crypto application. The site allows anyone to bet on the outcome of events using cryptography. Events have a “yes or no” outcome and users can bet on “yes” or “no”. The potential payout is proportional to the assumed probability of the outcome. Therefore, if the majority of market participants believe the event is likely to occur, the payout for betting on “yes” will be much lower than betting on “no”. It works in a similar way to sports betting: events with lower odds of winning pay more and payouts evolve as bettors make their choices.
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The site hosts several events to bet on, such as the upcoming presidential election, several tweets from Elon Musk during a week, and how many weeks in a row Taylor Swift’s album will be at number one.
The site attracts hundreds of millions in bets, including a bet on whether Ethereum ETFs will be approved by May 31st. Before the Balchunas news was released, the site predicted a 10% chance of ETF approval by May 31. the odds shot up to almost 75% within hours. The odds are currently around 70%, meaning punters could see returns of almost 50% if the event occurs. On the other hand, betting against ETF approval would yield net returns in excess of 200%.
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The bet’s rules state that it “will be settled as ‘Yes’ if any Ethereum spot ETF receives SEC approval by May 31, 2024, 11:59:59 PM ET. Otherwise, this market will be settled as ‘No’ .” This language is somewhat unclear because, as noted above, approvals may not be as clear as they are governed by the rules. Regardless, the bet is extremely interesting to watch as it gives you an idea of how retail and other market participants are valuing the possibility of ETH ETFs by the end of the week.
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This article Will Ethereum ETFs be approved on Thursday? Here’s What This Crypto Prediction Market Tells Us originally appeared in Benzinga.com
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