Deniz 
Despite general market agreement that a spot Ethereum ETF clearance is unlikely to occur anytime soon, Coinbase analyst David Han suggested the market may be underestimating the likelihood of one.
Han said in a Thursday report, “We think the market may be underestimating the timing and odds of a potential approval.” “Ether does not seem to have major sources of supply-side overhangs such as token unlocks or miner sell pressure. It may yet surprise to the upside in the coming months.”
Important dates for the Securities and Exchange Commission to decide whether to accept the spot Ethereum ETF applications filed by VanEck and ArkInvest/21 Shares are May 23 and May 24.
With the SEC seemingly silent with issuers, Bloomberg ETF analyst Eric Balchunas characterizes the chances of approval as “slim to none,” and expectations of approval this month have dropped significantly.
Coinbase did note that, given the same justification that was used to approve the spot Bitcoin ETFs—that is, that the correlation between the CME futures product and the spot exchange rates is sufficiently high—the existence of a U.S. spot Ethereum ETF is still a question of “when, not if.”
Should the correlation maintain, Han added, the remaining reasons for dissatisfaction are probably related to the distinctions between Ethereum and Bitcoin, the most pertinent of which is Ethereum’s proof-of-stake method.
Coinbase feels spot Ethereum ETFs with staking incentives are unlikely to be permitted anytime soon in the absence of clear regulatory advice on staking. Interestingly, last week Ark Invest removed the staking portion of their spot Ethereum ETF application. “That said, in our opinion, this shouldn’t affect the status of unstaked ether,” Han stated.
Pricing in odds of a May approval is 16% on the Ethereum-based decentralized prediction market platform Polymarket, and the Grayscale Ethereum Trust (ETHE) is trading at a 24% discount to net asset value.
But Coinbase feels the chances of acceptance are closer to 30–40% as cryptocurrency becomes more and more of an election issue and with potential legal action in the event of denials.
On Tuesday, Balchunas speculated that a recently discovered element in a spot Ethereum ETF file indicated the SEC was perhaps considering ether a security in probable ETF rejections.
Year to year, Ethereum has performed worse than many other large-cap cryptocurrencies, rising only about 33% in 2024 compared to solana’s 64% and bitcoin’s 57% price increases.