Key Points
- The probability of Ethereum ETF approval in May has plummeted to less than 25% on Polymarket.
- Vijay Boyapati suggests that a potential ETH ETF rejection could boost Bitcoin.
The general market sentiment seems to anticipate a possible rejection of US spot Ethereum (ETH) ETF applications in May.
This sentiment is reflected on the prediction markets platform, Polymarket, where the odds for an ETH ETF approval in May have decreased by 68%, leaving only a 24% chance.
Analysts Echo Market Sentiment
Bloomberg ETF analysts Eric Balchunas and James Seyffart, who accurately predicted the US spot Bitcoin (BTC) ETF approval, have also expressed similar sentiments.
Seyffart recently highlighted the SEC’s lack of response or feedback to recent ETH ETF filings as a significant concern.
He was responding to Balchunas’ comment that the SEC was not providing crucial feedback even during face-to-face meetings, implying that the chances for May approval remain slim.
Possible Impact on Bitcoin
With May quickly approaching and approval odds looking doubtful, Vijay Boyapati, a commentator and author, has suggested that a rejection could benefit Bitcoin.
He believes that the capital that flowed into ETH due to ETF speculation could return to Bitcoin if the Ethereum ETFs are all rejected.
For Boyapati’s prediction to occur, ETH’s market dominance would need to decrease significantly as BTC’s increases.
According to CoinMarketCap, BTC’s market dominance was 52.4% at the time of writing, primarily due to robust ETF flows in the past three months. ETH’s market dominance was at 16.5%.
If Boyapati’s theory is confirmed, ETH’s market dominance could fall below 16% or 15% as the market adjusts to an ETH ETF rejection in May. This could potentially stimulate BTC momentum.
Currently, ETH is above a critical weekly bearish order block (3.2K—3.5K) and is consolidating around the Q1 2022 local top. A drop below 3.2K could trigger a bear market, especially if ETH ETF applications are rejected.
