Experts are currently arguing about the likelihood of the US Securities and Exchange Commission (SEC) approving a spot Ethereum ETF. Among others, Samson Mow, known as the “Bitcoin Maximalist” and founder of Jan3, a company focused on accelerating the nation-state adoption of BTC, voiced strong doubts and criticism.

Mow’s Critique: Dissecting The Ethereum ETF Dilemma

Samson Mow’s analysis of the Ethereum ETF situation is rich with insight and skepticism, offering a detailed critique that touches on regulatory inconsistencies, ETH’s unique characteristics, and the speculative nature of its market dynamics. Mow’s statement on X (formerly Twitter) serves as a critical assessment of what the approval—or denial—of an ETH ETF might mean for the broader crypto landscape.

“The Ethereum ETF is not a sell the news event, it’s a sell the shitcoin event. Meaning sell anytime. I would say odds are 50/50 for approval, but both approval and rejection are mega bearish for Ethereum,” Mow asserted, setting the tone for his argument against the Ethereum ETF. His remarks underscore a deep-seated skepticism toward ETH’s valuation and its position within the regulatory framework of the SEC.

Mow further delves into the regulatory conundrum faced by the SEC, stating, “The SEC footgunned themselves by approving ETH futures (along with BTC futures), which means rationally they need to approve the ETH spot ETF for the same reasons as the BTC one.” This observation highlights the precedent set by the SEC’s previous actions, which Mow views as complicating the decision-making process regarding the Ethereum ETF.

Addressing the complexities introduced by Ethereum’s design, particularly its staking mechanism and its pre-mine, Mow articulates a series of rhetorical questions: “What kind of commodity generates a yield? What kind of commodity ETF prints 70% of its supply out of thin air? What kind of commodity ETF tweaks its own ‘monetary’ policy at will (uLtRasOuNd m0nEy)?” These questions not only challenge conventional definitions of commodities but also point to the difficulties in categorizing Ethereum within existing regulatory and investment frameworks.

Mow’s critique extends to the speculative nature of ETH’s price movements based on Bitcoin’s ETF success story, attributing recent gains to “hope of approval” rather than genuine capital inflows. Even in the case of an approval, Mow predicts an ETH price downturn. Why? Because analogous to the spot Bitcoin ETF launch, there’s the Grayscale Ethereum Trust (ETHE) which holds 2.9 million ETH. These would then become redeemable, 2.4% of the current supply.

Therefore, he predicts a no-win situation for Ether, explaining that “If a Ethereum spot ETF isn’t approved, the speculators will sell. If an spot ETH ETF is approved, the existing holders will sell, and no one is going to buy because it’s structurally defective.”

The Odds Of Approval Have Declined

As reported by Bitcoinist, Bloomberg’s ETF expert Eric Balchunas has recently drastically changed his odds for a spot Ethereum ETF approval in the US. “Yeah our odds of ETH ETF approval by May deadline are down to 35%,” Balchunas shared, reflecting a cautious stance by the SEC’s historical positions and current signals from the agency.

At press time, ETH traded at $4,003.