Coinbase analyst David Han says that the market may be underestimating the potential for Ethereum, with the U.S. Securities and Exchange Commission (SEC) set to make decisions on May 23 and May 24 regarding spot Ethereum exchange-traded funds. Despite wide expectations that the SEC will not approve the fund, Han says, “It’s a question of when, not if,” along the lines of previously rejected spot Bitcoin ETFs.

Currently, the Ethereum-based decentralized prediction market Polymarket is estimating only a 16% chance of approval this May, while the Grayscale Ethereum Trust continues to trade at a 24% discount to its net asset value. Yet, Coinbase is even more bullish, estimating a 30-40% chance of approval, among other reasons, due to the long-standing appeal of Ethereum, which is both a store-of-value and a technology-token.

Han goes on to further explain his own bullishness on Ethereum: “Ethereum has many demand drivers and may well outperform in the back half of the year. While it has underperformed since the October peak, our view remains that Ethereum possesses a unique combination of (1) large and extremely diverse use cases; (2) a relatively mature developer ecosystem; and (3) substantial utilization in decentralized finance, which creates a strong stage for future price appreciation and defends against threatening ‘Ethereum killer’ narratives.”

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