Crypto traders have entered the speculative market, making bets on the potential approval of a spot Ethereum exchange-traded fund (ETF) by the United States Securities and Exchange Commission. The United States SEC is set to make its verdict before May 31, and market participants have lined up to make bets on it on Ploymarket.
Polymarket registers bets on the approval of a spot Ethereum ETF
Polymarket is a crypto-based gambling platform where participants in the crypto market make bets on the likelihood of events happening. The current dynamics on Polymarket have shown that traders are actively speculating on the outcome of the SEC concerning the Ethereum ETF approval. Presently, over $2.4 million worth of bets have been placed on the platform, with about 81% of the traders unsure of the likelihood of an approval occurring before the end of May.
Crypto traders purchase shares that reflect their choice of bets on Polymarket. The value of the shares on the platform is volatile, fluctuating to mirror real-life sentiments in the market. Presently, the share representing Yes for approval goes for $0.19, while a share representing No goes for $0.81. The current pricing is an indication that there is little belief that the approval will happen before the set date, and traders are betting on it.
Notably, both categories of shares have seen a significant amount of investment made in them. Presently, the highest investment in the Yes category is worth $84,000 while the highest investment in the No category stands at $127,000. The investment made in these shares shows how serious traders on Polymarket are willing to back their predictions.
Market sentiment and Grayscale’s optimism
The outcome of the bets placed on Polymarket lies solely on the action of the United States SEC toward the approval of an Ethereum ETF. This means that the SEC needs to approve an Ethereum ETF by May 31, 2024, at 11:59 ET for Yes share bettors to win their bets. While the traders who hold the No shares will win if the SEC doesn’t approve the ETF by the deadline.
This is not the first time such actions tied to the crypto industry will be taking place on the platform. Before the SEC approved spot Bitcoin ETF, bettors on the platform made bets on it. However, there has been criticism from all angles on bettors on the platform, with most people questioning why they would choose to engage in an activity that yields such little profits.
Despite the skepticism, the betting market for ETF outcomes has seen substantial activity, with at least $12 million in total bets. Interestingly, investment management firm Grayscale has expressed optimism regarding the approval of spot Ether ETFs. Craig Salm, Grayscale’s Chief Legal Officer, emphasized that the SEC’s apparent lack of engagement with applicants should not be construed as a definitive indicator of approval or rejection.
This confidence from a prominent player in the crypto investment space adds another dimension to the ongoing speculation surrounding ETF approvals. The gambling market surrounding the approval of a spot Ethereum ETF by the SEC reflects the diverse sentiments and expectations within the crypto community. As the May 31 deadline approaches, traders continue to monitor developments closely, with their bets serving as a barometer of market sentiment and confidence in regulatory outcomes.
