What You Should Know About the Potential Impact of Spot Ethereum ETFs on ETH Price
The U.S. Securities and Exchange Commission (SEC) has granted approval for Ethereum ETFs to be listed on major exchanges like NASDAQ and NYSE, marking a significant milestone for the cryptocurrency industry. This move not only signifies progress but also positions Ethereum as the coveted “digital oil” in the crypto market, similar to Bitcoin’s status as “digital gold.”
However, it’s important to exercise caution and not get ahead of ourselves just yet.
Assessing the Performance
Despite Ethereum’s impressive growth, it still lags behind Bitcoin’s dominance. On May 24, Bitcoin spot ETFs experienced a substantial net inflow of $252 million, extending a streak of ten consecutive days of inflows. Notably, Grayscale’s ETF GBTC remained neutral, while BlackRock’s ETF IBIT recorded an inflow of $182 million, and Fidelity’s ETF FBTC attracted $43.7083 million.
The Influence of Major Players
The support of major players like BlackRock signifies a turning point for Ethereum, potentially bringing it into the mainstream investor realm. This endorsement not only validates Ethereum’s potential but also indicates its increasing appeal among institutional investors.
The Two-Step Approval Process
The next step is the two-step approval process. Despite the excitement, it’s crucial to note that trading will not commence immediately. While the SEC has approved the listing of these ETFs, individual ETF registration statements still need approval. This two-step process includes both listing approval, which has been completed, and product approval, which is still pending.
As a result, actual trading may still be weeks or even months away, following a similar approval process as seen with Bitcoin ETFs.
Why the Sudden Change in Pace for the SEC?
Aeron from Altcoin Daily suggests that the sudden approval could be politically motivated, with both presidential candidates vying for the support of the crypto community. This swift and somewhat unexpected decision may reflect strategic moves in an election year, highlighting the growing influence of the cryptocurrency sector in the political landscape.
A Rollercoaster Ride for ETH Price
Before the SEC’s announcement, Ethereum’s price experienced significant fluctuations. It dipped to $3,500, surged to nearly $3,900 on ETF rumors, and settled above $3,800 after confirmation. Nevertheless, Ethereum has yet to reach its peak of $4,800 in November 2021 and is currently hovering around $3,700.
With regulatory clarity, Aeron predicts a bullish trajectory for Ethereum. With decreasing exchange balances and the anticipation of ETF-driven demand, Aeron forecasts a three to fourfold increase in Ethereum’s value over the next 18 months, potentially reaching $11,000 to $15,000 per coin.
This optimistic outlook emphasizes the transformative potential of the recent ETF approval and hints at Ethereum’s journey to new heights.
The future of Ethereum is filled with possibilities. What aspect are you most excited about?