ETFs
Ethereum ETFs approved by the SEC? Yes, but don’t bet on it
Now that the United States Securities and Exchange Commission has approved eight Ethereum ETFanother crypto battle has broken out over what “approved” actually means.
It was the debate that raged Polymarketsat least, after crypto degens bet more than $13 million that the SEC would approve an Ethereum spot ETF by May 31.
The open bet went live on January 9 as anticipation of SEC approval for the first Bitcoin ETFs reached a fever pitch. The fundamental question behind any potential Ethereum ETF approval was whether Ethereum is a security or a commodity – what if Bitcoin had paved the way for Ethereum.
Financial analysts and crypto commentators have regularly commented on their predictions, which became more and more pessimistic amid aggressive SEC action against other crypto projects. As the May deadline solidified for a decision, some proposed that a delay would actually be a good thing. Last month, JP Morgan put the chances of approval at 50%.
Polymarket users are betting on the question “Ethereum ETF approved by May 31?” Image: Polymarché
But last week, the mood began to change: Coinbase estimated that a Ethereum ETF would become reality last week, and when two Bloomberg ETF analysts revised their own chances of approval from 25% to 75% on Monday, the price of ETH began to skyrocket.
Punters at Polymarket were also watching closely. The SEC’s collective chance of approval rose from 13% to more than 50% on the site Monday. When the SEC announced Thursday that it approve Ethereum spot ETF applications, optimistic punters were jubilant. Surely the answer to the question of whether an Ethereum ETF would be approved before May 31 is “yes”?
Not so fast, many argued.
“Too bad they didn’t spell out the terms of the actual bet, there was $11 million on the line,” one Twitter user said. Observer wrote. “I checked this afternoon and thought, ‘That doesn’t even define what ETF approval means… it’s going to end in a big fight.'”
Technically, the SEC had approved rule changes allowing large investment firms like Grayscale, BlackRock, Fidelity, and VanEck to continue with submitted and amended plans to offer Ethereum spot ETFs. But those specific funds have not yet been approved, a process that could take more than a week and exceed Polymarket’s May 31 deadline.
With some calling the bet “rigged,” nearly 1,000 comments were posted on the event page.
“Let’s be real: a lot of people had too much faith that the SEC was going to deny it and are now crying foul that the SEC turned around and bullied them,” one Polymarket user wrote. “ETH ETF approved… [by] consensus on credible reporting.
“The best solution would be to establish a 50/50 split and clarify that the rules were not sufficient to select a clear winner,” another Polymarket user suggested.
On the other hand, the wording of the SEC decision was clear: “This order approves the proposals on an expedited basis. »
“For all you non-stock and salty people: take market rules and polymarket resolution to ANY verbal SAT/GMAT teacher and see what they say. Hint: everyone will agree with Polymarket because it is basic reading comprehension,” wrote one Polymarket user.
Polymarket users were given the opportunity to contest the outcome of the bet, but by 8:18 p.m. ET, the yes vote was consolidated. For many, the simplest answer was always the best.
“I’m just an investor in Polymarket and a general prediction market enthusiast, so I have no impact here on the final resolution,” Polymarket investor Nick Tomaino wrote on Twitter. “But in my opinion, for a prediction market platform to be successful in the long term, it is important to act according to the spirit of the market. Otherwise, the masses won’t trust it.”
Once the big bet was settled, the broader crypto market simply moved on. THE Ethereum price barely moved after the approvals were announced, although it is up almost 30% for the week, hitting $3,937 intraday and trading at $3,819 at the time of writing.
Launched in 2020, Polymarket is a blockchain-based prediction market platform that allows users to stake tokens and win on the outcomes of current events such as elections, sports, and news. Earlier this month, Polymarket announced an increase $70 million with funding participants including Ethereum co-founder Vitalik Buterin.
Edited by Ryan Ozawa.