The Ethereum ecosystem might be entering its most bullish phase with the upcoming launch of the first spot Ether exchange-traded funds (ETFs).
This launch is expected to mitigate most of the risks associated with Ether, as noted by Raman in a July 22 post on X:
“In hindsight, the second half of 2024 will be the most obvious bullish setup for the Ethereum ecosystem in recent history. Three headwinds that have held ETH back will become tailwinds, starting this week.”
ETFs can significantly enhance the value of the underlying crypto asset.
For instance, by February 15, Bitcoin ETFs had accounted for about 75% of new investment in Bitcoin, helping it surpass the $50,000 mark.
The introduction of Ether ETFs is anticipated to bring new capital to the crypto industry from both institutional and retail investors. Raman highlights this:
“Retail only wants to invest passively, and institutions only want to invest after regulatory clarity. The ETH ETF will unlock new inflows from both in one fell swoop.”
The launch of these ETFs will likely end the current “regulatory purgatory,” providing much-needed regulatory clarity for Ether.
Charles d’Haussy, CEO of the dYdX Foundation, suggests that Ether ETFs could capture around 25% of the assets under management (AUM) of existing spot Bitcoin ETFs.
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Additionally, Raman believes the launch could mark the end of the United States Securities and Exchange Commission’s (SEC) “regulatory witch hunt against ETH,” fostering more innovation within the Ethereum ecosystem.
Moreover, Ether’s price could benefit from a broader macroeconomic shift towards risk-on assets during the latter half of 2024, driven by potential interest rate cuts in the United States.
Over the past two years, investor capital has moved towards safer, large market-cap companies like Nvidia due to interest rate hikes and monetary tightening. Raman indicates this trend is poised to reverse:
“The political view of crypto – which has been unabashedly hostile for years – is changing.
“The largest capital markets in the world are finally embracing crypto, and new institutional + retail capital will flow into ETH + BTC, with the ETFs as the safest on-ramps.”
Despite Ether’s current struggle to breach the $3,500 resistance line, it is up over 4.5% on the weekly chart, according to CoinMarketCap data.
Other analysts, like Matt Hougan, chief investment officer of Bitwise, are also optimistic, predicting Ether will reach a new all-time high shortly after the ETF launches.
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