SEC approved Ethereum ETF? That’s right. But don’t bet on it

Now, after the U.S. Securities and Exchange Commission approved eight spot Ethereum ETFs, another cryptocurrency war has erupted over what “approval” actually means.

At the very least, a heated debate erupted on PolyMarket after Cryptocurrency Digens bet more than $13 million that the SEC would approve a spot Ethereum ETF by May 31.

Public betting began on January 9th as anticipation for SEC approval of the first Bitcoin ETF reached fever pitch. The fundamental questions driving the approval of a potential Ethereum ETF were whether Ethereum is a security or a commodity, and whether Bitcoin has paved the way for Ethereum to follow.

Financial analysts and cryptocurrency commentators regularly weigh in on their predictions, which have become increasingly pessimistic due to the SEC’s aggressive moves toward other cryptocurrency projects. As the May decision deadline was confirmed, some suggested that delaying it might actually be a good thing. Last month, JP Morgan presented a 50% chance of approval.

But last week the mood began to change. Coinbase said last week that an Ethereum ETF would become a reality, and the price of ETH began to surge after two Bloomberg ETF analysts revised their odds of approval from 25% to 75% on Monday. .

Polymarket bettors were also watching closely. On the site Monday, the odds of SEC approval soared from 13% to more than 50%. Bullish bettors cheered when the SEC announced Thursday that it would approve applications for an Ethereum spot ETF. The answer to whether an Ethereum ETF will be approved before May 31st is a resounding “yes.”

Not so fast, many argued.

Twitter user Observoor wrote: “It’s a shame they didn’t define the actual betting terms. The amount to play was $11 million.” “I checked this afternoon and thought, ‘This doesn’t even define what ETF approval means… and it’s going to end in a big fight.’”

Technically, the SEC approved a rule change that would allow major investment firms like Grayscale, BlackRock, Fidelity, and VanEck to move forward with their filed and revised plans to offer spot Ethereum ETFs. However, those specific funds have not yet been approved and this process could take a week or more and exceed the Polymarket deadline of May 31.

Nearly 1,000 comments were posted on the event page, with some people claiming the bet was “rigged.”

“Let’s be realistic. Many people were overconfident that the SEC would deny it and are now accusing the SEC of doing a U-turn and coercing them,” wrote one Polymarket user. “ETH ETF approved… (by consensus on reliable reporting).”

Another Polymarket user suggested that “the best solution is to split it 50/50 and make it clear that the rules aren’t enough to pick a clear winner.”

On the other hand, the wording of the SEC decision was clear. “This order expeditiously approves the proposal.”

“For all of you who don’t own stocks and are salty: Take the rules of the market and the resolutions of polymarkets to your SAT/GMAT language professors and see what they say. Hint: Everyone will agree with Polymarket because it is basic reading comprehension,” one Polymarket user wrote.

PolyMarket users were given the opportunity to contest the bet results, but a yes vote was confirmed by 8:18 PM ET. For many people, the simplest answer has always been the best answer.

“I’m just an investor in Polymarket and a fan of prediction markets in general, so I have no influence on the final resolution,” Polymarket investor Nick Tomaino wrote on Twitter. “However, I think it is important for prediction market platforms to address the market spirit in order to be successful in the long term. “Otherwise the public won’t trust it.”

The broader cryptocurrency market continued to move forward as big bets were confirmed. Ethereum’s price barely moved on news of the approval, but as of this writing it soared to $3,937 during the day and is trading at $3,819, up nearly 30% for the week.

Launched in 2020, Polymarket is a blockchain-based prediction market platform that allows users to stake tokens and earn profits based on the results of current affairs, including elections, sports, and current affairs. Earlier this month, PolyMarket announced that it had raised $70 million, with participants in the fund including Ethereum co-founder Vitalik Buterin.

Edited by Ryan Ozawa.