Here’s Why an Ethereum ETF Boom Shouldn’t be Expected Overnight
SEC Grants Preliminary Approval for Ethereum ETFs, Final Approval Still Pending
Contrary to popular belief, the Securities and Exchange Commission (SEC) has not fully approved Ethereum Exchange-Traded Funds (ETFs). While the SEC has given the green light to Form 19b-4 for eight Ethereum ETF issuers, including industry giants like BlackRock and Fidelity, the final approval is still pending. This news has generated a mix of excitement and caution in the cryptocurrency community, as investors eagerly anticipate Ethereum’s potential to reach new heights.
Although progress has been made, it is essential to clarify that the recent approval from the SEC only covers Form 19b-4 and does not include the more comprehensive S-1 registration statements. This means that while things are moving forward, the ultimate thumbs-up that everyone is waiting for has not yet arrived. Investors remain hopeful but are aware that the critical approvals are still in the pipeline. As @JSeyff aptly puts it, “TO BE CLEAR: This does not mean they will begin trading tomorrow. This is just 19b-4 approval. Also needs to be approval on the S-1 documents which is going to take time.”
Unlike Bitcoin Spot ETFs, which followed a different path to approval, the Ethereum ETF received the go-ahead through the Division of Trading and Markets with “delegated authority.” However, this does not eliminate the possibility of potential challenges within a 10-day window from commissioners, adding an element of uncertainty to the process. Additionally, there is the looming possibility of political obstacles that further complicate the final approval.
It is crucial to understand that the approval to list Ethereum ETFs represents a significant milestone but does not immediately translate into buying opportunities. This distinction has restrained a substantial price surge thus far, as institutional investors await the green light for ETH trading. Once that happens, a flood of institutional investment is expected to initiate a bullish run. However, regulatory complexities and political dynamics are slowing down the process, leading to cautious optimism amidst broader uncertainties.
On the technical front, Ethereum has overcome various obstacles, supported by relatively low network fees that could stimulate more activity. Nevertheless, surpassing the $4,000 valuation threshold might take some time. History reminds us that ETF approvals do not always result in an instant surge; Bitcoin experienced a brief dip after spot Bitcoin ETFs received approval earlier this year before rebounding.
Despite Ethereum educator Sassal’s confidence that the ETF approval has not been fully priced in yet, the market remains cautiously optimistic. While Ethereum has demonstrated resilience this month, it may take a while for the full impact of the ETF approval to materialize. Recent market movements, such as a momentary 1.2% decline in Bitcoin’s price followed by a 5% rally in cryptocurrencies like Pepe after the news, highlight the complex factors at play.
VanEck has submitted a revised S-1 to the SEC, with analysts predicting clearance in the coming weeks to months. Crypto analyst Zach Rynes believes that once ETF inflows begin, Ether prices will experience a significant boost.
The SEC’s progress regarding Ethereum ETFs is undoubtedly a positive step, but whether it will be enough to fuel a substantial price surge remains to be seen. Share your thoughts on this matter.
Tags: Ethereum ETF