Ether Jumped 13.8% as Spot ETF Expectations Reversed

Ether surged on May 20, 2024 as traders abruptly reconsidered the likelihood that the U.S. Securities and Exchange Commission would approve exchange rule changes for funds holding spot ether. Reuters reported that ether gained 13.8% during the Monday session, while contemporaneous cryptocurrency reporting recorded an especially sharp move after two Bloomberg Intelligence ETF analysts raised their informal approval estimate.

The catalyst was not an SEC order. Eric Balchunas said on May 20 that he and fellow Bloomberg analyst James Seyffart had increased their estimated probability of approval to 75% from 25%, citing regulatory “chatter” and the possibility of an unexpected reversal. Seyffart separately said the outlook was improving. Those percentages represented the analysts’ judgment, not an agency forecast or a probability derived from a disclosed statistical model.

A rapid market repricing

Reuters’ May 21 market report described spot ether in U.S.-dollar terms as having gained 13.8% on May 20. The report did not identify a single execution venue, benchmark administrator or precise daily cutoff, so the figure should be read as Reuters’ market measurement rather than a universal close for an asset that trades continuously across exchanges.

CoinDesk reported during U.S. trading hours that ether initially jumped more than 10% following the analysts’ reassessment. The Block’s price page placed ether near $3,090 at approximately 3:13 p.m. Eastern and near $3,560 at 3:35 p.m., an increase of about 15.2% calculated from those two rounded observations. That calculation describes a 22-minute interval on The Block’s dataset; it is not a full-day return or proof that one report caused every trade.

The reaction extended beyond ether. CoinDesk reported bitcoin gaining more than 5% and Grayscale Ethereum Trust shares rising more than 23% during May 20. Those moves were consistent with a broad repricing of the potential approval path, but contemporaneous reporting could not establish a single cause across cryptocurrency and securities markets.

Why the shift mattered

Before May 20, expectations had been subdued because the SEC’s public engagement with spot-ether applicants appeared limited compared with the process preceding January’s spot-bitcoin approvals. The agency faced a May 23 deadline involving VanEck’s proposed product, followed by another deadline for the ARK and 21Shares proposal on May 24. Nine issuers had applications in the process, according to Reuters.

Reports emerging on May 20 said exchanges seeking to list the products had been asked to update their Rule 19b-4 filings. Reuters characterized that information as unconfirmed and reported that an SEC spokesperson declined to discuss individual filings. The distinction was material: exchanges needed approval for their listing-rule changes, while each issuer’s registration statement also had to become effective before shares could trade.

The market therefore moved on a change in perceived regulatory probability rather than a completed regulatory action. The scale and speed of the rally illustrated how heavily positioning had leaned toward rejection and how quickly an informal assessment could alter prices in a continuously traded market.

What remained uncertain on May 20

No public SEC document issued on May 20 confirmed that approval was coming. The analysts’ 75% estimate could have been wrong, reports about private communications could not be independently inspected, and neither an approved exchange rule nor an effective registration statement existed at that point. Claims that political considerations dictated the agency’s process were speculation, not verified findings.

Later context

On May 23, 2024, the SEC approved eight proposed exchange rule changes covering ether-based exchange-traded products. Its order also stated that shares could not begin trading until the corresponding registration statements became effective. That later decision confirms the relevance of the May 20 repricing but was not knowable as an outcome when the rally occurred.