The agency’s relative silence over the pending applications in recent months led many in the cryptocurrency industry to regard an approval this year as a pipedream. Bloomberg analysts were predicting the odds of approval to be as low as 25% as late as Monday afternoon. But then, in a sudden turn of events, on Monday, CoinDesk first reported that the issuers were “abruptly” asked by regulators to update their 19b-4 filings on an accelerated basis. Since then, at least eight of the nine issuers have done so—and Bloomberg’s experts raised their projection to 75%.

The price of Ether has soared 25% since Monday, trading at $3,855 as of 5:13pm EST.

The updates requested by the SEC on Monday remain undisclosed, but Eric Balchunas, Bloomberg’s senior ETF analyst, told Fortune he knows “for a fact” that staking will be prohibited. Indeed, Fidelity this week updated its S-1 filing with the staking component omitted. 

But for trading of the financial products to begin, the SEC must next approve the issuers’ S-1 filings. These forms outline to potential investors and the SEC the structure of the asset, how it will be managed, and, in this case, how it plans to mirror the performance of the underlying asset—Ether tokens. But it’s also understood that the approval of these forms is a case of “when not if,” Bloomberg’s James Seyffart wrote on X.

“We can’t recall anytime there would be S-1s not approved after a 19b-4 approval. I don’t think a precedent exists,” Balchnaus added. He estimates the forms will take about two weeks to be approved, as he expects there to be only one round of comments from the SEC. That’s because the spot Bitcoin ETFs already did a lot of the “trailblazing,” so in this case, the applications will require minor “fine tuning.” In case of Bitcoin ETFs, each round of comments required two weeks to complete. 

‘A legitimate voting block’

It’s the question erupting throughout crypto: Why did the SEC change its tune? Experts told Fortune it was likely a political, top-down order. The approval on Thursday is “proof that the crypto crowd is a legitimate voting block,” says VanEck’s Sigel.  

A bipartisan group of crypto-friendly House lawmakers urged the SEC and Chairman Gary Gensler to approve the ETFs in a letter on Wednesday. “The current digital asset regulatory landscape presents various risks to consumers, investors, and market participants,” they wrote. An approval would offer investors access to crypto in a safer, more transparent and regulated format, they argued.

Admittedly, although the letter is unlikely to have tipped the scale, it does add to a building consensus in Washington that the elusive crypto vote may have weight.

“Politics is powerful, and especially in an election year. What we’ve heard inside is that this was politically driven. The Democrats do not want to see Donald Trump and the Republicans win on this issue, and lose votes from single-issue voters,” says Balchunas.

A survey published this week by the Federal Reserve reveals that just 1% of Americans used crypto to buy something in 2023, but in a razor-thin election, with Trump polling just 1% ahead of President Joe Biden, even 100,000 votes or so could make the difference.

‘Very gratifying’

As a result, the crypto community appears to be a growing priority in Washington, D.C. On Wednesday, the House of Representatives voted in favor of a landmark piece of regulation that would establish a supervisory framework around the “market structure.”

The Financial Innovation and Technology for the 21st Century Act, or “FIT21,” outlines the separation of powers between the Securities and Exchange Commission and the Commodity Futures Trading Commission, as well as creates rules for pivotal questions such as commingling and custody. While the bill was supported by 208 Republicans, at first, it was only favored forward by a handful of stubborn, crypto-friendly Democrats. But over the last month, support accelerated, resulting in 71 Democrats voting in favor, with support also coming from Senate Majority Leader Chuck Schumer and former House Speaker Nancy Pelosi.

“It is very gratifying that effective communication by the crypto community changed the politics in Washington to the point that elected Democrat leaders are now voting ‘yes’ to laws that reverse the regime’s hostile approach to this new asset class,” Sigel says.

FIT21 passing through the House flew in the face of Gensler’s attempts to warn Democrats off it. “[FIT21] would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk,” Gensler said in the statement released Wednesday.

Moreover, over the past month Trump has also doubled down on his pro-crypto stance. On Tuesday, his presidential campaign said it would start to accept donations via any crypto asset accepted through Coinbase. “Biden surrogate Elizabeth Warren said in an attack on cryptocurrency that she was building an ‘anti-crypto army’ to restrict Americans’ right to make their own financial choices,” the campaign said in the announcement, in reference to a reelection ad Warren posted on X last year. “MAGA supporters, now with a new cryptocurrency option, will build a crypto army moving the campaign to victory on November 5th!”