Coinbase estimates that the likelihood of the SEC approving spot Ethereum ETFs by the end of this month ranges between 30% to 40%. According to Coinbase Institutional Research Analyst David Han, the SEC's approval of spot Bitcoin ETFs was influenced by the correlation between CME futures and spot exchange rates, a factor that could similarly favor spot Ethereum ETFs.

Han suggested there is potential for a positive surprise in the decision, citing predictions from both markets and the fact that Grayscale Ethereum Trust is trading at a significant discount of 24%. However, he acknowledged uncertainty due to the SEC's lack of clear communication, particularly noting that ETFs focusing on ETH staking are unlikely to receive approval.

Coinbase remains cautiously optimistic, partly due to the cryptocurrency's role in US politics, where denying spot ETH ETFs could entail political risks for the SEC, particularly given the Democratic leadership at the agency. Han highlighted that the SEC has discretion over approving each application individually, with VanEck's application due for a decision by May 23 and others like BlackRock and Fidelity potentially awaiting decisions until August.

Han also suggested that a rejection in May might lead to legal challenges, similar to the situation with Grayscale's GBTC conversion proposal that influenced the SEC's stance on Bitcoin ETFs earlier this year. Despite differing opinions in the industry, Coinbase's stance represents a more optimistic view compared to some analysts, including Bloomberg's Eric Balchunas, who considers the odds of approval to be low.

In conclusion, while various predictions and market sentiments vary, Coinbase maintains a cautiously hopeful outlook regarding the approval of spot Ethereum ETFs by the SEC.