In a recent shift of perspective, Bloomberg analysts have significantly lowered the forecast for the approval of a spot Ethereum exchange-traded fund (ETF) by May — setting the probability at a mere 35%.

According to Eric Balchunas, the odds are down sharply from previous estimates, which ranged between 60% and 70%.

The revision reflects growing skepticism about the regulatory green light for Ethereum ETFs, contrasting the previously more optimistic stance.

No sign of activity

The caution among analysts follows recent discussions between Coinbase, Grayscale, and the SEC regarding the potential conversion of Grayscale’s Ethereum Trust into an ETF. While such meetings might usually indicate a positive trajectory, the absence of subsequent SEC commentary has tempered expectations.

Balchunas and other analysts — including James Seyffart and Eleanor Terret — said that there is a distinct lack of activity in the regulatory circles despite the deadline being two months away.

In contrast, there was a flurry of activity among the SEC and spot Bitcoin ETF issuers for more than 10 weeks before the applications were approved.

Seyffart said:

“This Ethereum ETF cycle feels like the opposite of Bitcoin ETF approval odds at the moment. The more we see/hear (and don’t see/hear), the less optimistic I become.”

However, the analysts added that the activity could pick up pace in the coming days. They also said that the expectation remains that an ETH ETF will be approved sometime this year — even if not in May.

Cautiously hopeful

Despite these lowered expectations, some industry observers like Variant Fund’s Chief Legal Officer, Jake Chervinsky, remain cautiously optimistic, suggesting that the upcoming weeks could provide clearer signals about the SEC’s direction.

However, he also raised concerns that the SEC may treat Ethereum like a security and would be unwilling to approve the applications without judicial intervention.

The overall sentiment appears to be veering towards skepticism, with major investment banks such as JPMorgan and TD Cowen also projecting unlikely approval by May.

In contrast to the Bloomberg analysts, the crypto market-making firm GSR has maintained a more hopeful stance, initially estimating a 70% chance of approval.

However, the firm recently admitted that this optimism might soon wane if there’s no visible progress in the next month.

Meanwhile, Standard Chartered has said multiple times that the SEC is likely to approve Ethereum ETFs in May.