Jake Chervinsky, Chief Legal Officer of cryptocurrency company Variant, has posted on X that he doubts the likelihood of a spot Ethereum (ETH) ETF approval this year.

Chervinsky’s comments come amid a bull run in the cryptocurrency markets, and he believes such an ETF could grow the market further.

SEC Faces Pressure in Ethereum ETF Approval

Despite previous triumphs with Bitcoin ETFs, the Securities and Exchange Commission (SEC) finds itself under mounting political pressure and amidst market instability, factors that could influence its decision-making process, according to Chervinsky.

I am a lot less confident about ETH ETF approval this year than many of you are.

The SEC got a ton of political blowback for approving BTC ETFs, even though the court basically forced it to.

Now animal spirits are in control of the market, and an ETH ETF would only add to that.

— Jake Chervinsky (@jchervinsky) March 1, 2024

While the current market is largely fueled by hype, Chervinsky believes introducing an Ethereum ETF could fuel this phenomenon, which refers to the emotional influences driving financial markets and often leading to heightened buying or selling periods.

Chervinsky noted that the SEC may have a legal argument that could justify rejecting an Ethereum ETF, even if it is unfounded. He observed the agency’s willingness to support controversial legal stances in court to achieve political objectives.

Despite BlackRock’s impressive track record in obtaining ETF approvals, Chervinsky suggested that this success came from its ability to exert pressure and a collaborative relationship with the SEC. He predicted that if the regulator were to request BlackRock and other Ethereum ETF sponsors to withdraw their applications, a common practice, they would likely comply.

Even with his skepticism regarding the timeline, Chervinsky acknowledged that approving an Ethereum ETF is more a matter of “when, not if.”

Meanwhile, senior Bloomberg ETF Analyst James Seyffart estimated a 60% chance of spot Ethereum ETFs being approved in May. However, analysts started reassessing their predictions as the SEC began postponing its decision on individual requests like Grayscale.

By February, Bernstein analysts Gautam Chhugani and Mahika Sapra were discussing a 50% chance of an Ethereum investment vehicle entering the market as early as May. Despite the uncertainty, individuals like CNBC’s Mad Money host Jim Cramer remain optimistic, believing there is a high probability of approval coming soon.

Companies Pursuing Spot Ethereum ETFs

Several investment asset management firms, including BlackRock and Grayscale, have expressed interest in spot Ethereum ETFs by submitting applications to the U.S. Securities and Exchange Commission (SEC).

BlackRock officially submitted its Ethereum ETF application in November 2023, preceding its approval for the spot Bitcoin ETF, iShares Bitcoin Trust (IBIT).

Grayscale, led by Michael Sonnenshein, is also vying for approval and submitted its application about a month before BlackRock’s. The company seeks to convert its Ethereum Trust (ETHE) into a spot Ethereum ETF, filing Form 19b-4 with the SEC alongside NYSE Arca. Other asset managers interested in this offering include Franklin Templeton, VanEck, and ARK 21Shares.